A N N U A L
R E P O R T
2021
2
0
2
1
Corporate Directory
ABN
84 121 700 105
Directors
Mark Clark – Executive Chairman
Mark Okeby – Non-Executive Director
Share Registry
Automic Pty Ltd
Level 2, 267 St Georges Terrace
PERTH WA 6000
Telephone:
+61 2 9698 5414 or 1300 288 664
Myles Ertzen – Non-Executive Director
Auditor
Bernard De Araugo – Non-Executive Director
KPMG Perth
Company Secretary
Kim Massey
Registered Office & Principal Place of Business
Level 1, 28 Ord Street
WEST PERTH WA 6005
Telephone:
+61 8 9212 4600
Facsimile:
+61 8 9212 4699
Email:
enquiries@capmet.com.au
Website:
capmetals.com.au
235 St Georges Terrace
PERTH WA 6000
Securities Exchange Listing
Australian Securities Exchange
ASX Code
CMM
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 1
Contents
Chairman’s Report
Review of Operations
Directors’ Report
Remuneration Report (Audited)
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors' Declaration
Independent Auditor’s Report
ASX Additional information
3
4
13
18
26
27
28
29
30
31
62
63
67
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 2
Chairman’s Report
Dear Shareholder
It is with pleasure that I write to you after what has been
a transformational year for Capricorn. By the end of the
financial year the Company had achieved its goal of
transitioning from explorer to gold producer with first
gold poured at Karlawinda in late June 2021.
Our construction team and key contractors have done a
great job in achieving this milestone on time and on
budget against the significant headwinds of COVID-19,
adverse weather and skilled labour shortages.
The transition of the project to full operations
is
progressing rapidly. Within two months from first gold
pour Karlawinda
in on full steady state
operations. The project is already generating strong
positive cashflow underlining the potential to deliver
robust returns for Capricorn shareholders for many years
to come.
is closing
to
As the project moves towards steady state production, we
turn our attention
the significant exploration
opportunity at Karlawinda. Over the last twelve months
we have built up a good geological understanding of our
regional tenement package and have undertaken
extensive first pass exploration work. That work has
targets and
generated
programmes have been planned to test these targets in
the current year. We are very conscious that a new
discovery within trucking distance of the processing plant
would add significant value for the Company.
several prospective drill
We have also been active in pursuing our goal of growing
Capricorn beyond the Karlawinda project. Shortly after
the end of the financial year we announced the
acquisition of the Mt Gibson Gold Project. The project has
a JORC compliant resource of 2.1 million ounces, is
located just 280km northeast of Perth in WA and has been
subject to very limited modern exploration. At an
acquisition cost of less than $20 per resource ounce, the
transaction represents an excellent value creation
opportunity and provides an outstanding platform for
Capricorn to grow in to an Australian focused multi mine
gold company.
We look forward to undertaking an extensive infill and
extensional drilling programme at Mt Gibson over the
next 12 months to allow an update to the current
resource and in due course completion of a Reserve
estimate and feasibility study. We are excited about the
long-term potential of the project.
I would like to thank all Capricorn management, staff and
contractors for their significant contributions to the
business over the last twelve months. It is through their
continued efforts that Capricorn has been able to become
a gold producer and lay the foundation for a strong future
for the Company.
Finally, I would like to thank you, the shareholders for
your continued support and look forward to an exciting
year ahead.
Mark Clark
Executive Chairman
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 3
Review of Operations
The Directors of Capricorn Metals Ltd (“Capricorn” or the “Company”) provide the following operations review.
Highlights
Karlawinda Gold Project
• Construction of the Karlawinda Gold Project (“KGP”) completed on time and on budget in June 2021 with first 386
ounces of gold poured on 30 June 2021.
• Project rapidly transitioning to steady state operations in September 2021 quarter with commissioning and
optimisation activities expected to be completed by the end of the September 2021 quarter.
Corporate
• Cash position at 30 June 2021 was $10.3 million, Macquarie Bank Limited (“Macquarie”) debt facility was drawn to
$70 million (with a further $10 million available).
• First gold sale of 1,477 ounces at $2,450 per ounce for $3.6 million achieved in early July 2021.
• Appointment of experienced metallurgist Mr Bernard De Araugo to the Board as non-executive director.
•
Investment of $1.2 million (11.68% interest) in gold and base metals explorer DiscovEx Resources Limited (ASX: DCX)
which holds a prospective tenement package proximal to the KGP.
Growth
• Subsequent to year end, the Company completed the acquisition of the Mt Gibson Gold Project, which has a JORC
2021 compliant Resource of 2.1 million ounces, for an acquisition cost of less than $20 per resource ounce plus a 1%
NSR royalty (including gold production in excess of 90,000 ounces). Acquisition of the project was financed from
existing cash reserves and the $20 million drawdown of the Macquarie debt facility to $90 million ($10 million remains
available).
Exploration
• Significant first pass exploration work undertaken across the extensive KGP tenement package including rock chip and
geochemical soil sampling programmes, detailed aeromagnetic surveys and geological mapping identifying several
prospective exploration targets for future drilling programmes.
• Near mine infill and extensional drill programme completed at Bibra during FY2021.
Strategy and Objectives
The focus of the Company during the year was the development and construction of the KGP culminating in the first gold
pour on 30 June 2021. The Company’s objectives are to:
• Continue to commission and optimise mining and processing operations at the KGP whilst maintaining a high standard
of safety;
• Achieve steady state production at KGP and maximise cash flow from operations;
• Organically increase the Reserves and Resources of the Company through systematic exploration activity across the
KGP tenement package;
• Advance the development of the Mt Gibson Gold Project by undertaking first pass confirmatory and resource
extension drilling after grant of the tenement applications;
•
In parallel with drilling, commence the technical and environmental studies required to underpin a Reserve estimate
and feasibility study on the project in due course; and
• Actively pursue inorganic growth opportunities.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 4
Review of Operations (Continued)
Corporate and Financial Review
Financial Position
The net loss attributable to members of the parent entity for the year was $4,765,000 (Restated* 2020: $17,947,000).
The cash balance of the Group at 30 June 2021 was $10.3 million, Macquarie debt facility was drawn to $70 million (with
a further $10 million available).
As at 30 June 2021, the Company had substantially completed the majority of the construction activities at the KGP. Gold
production commenced in June 2021 with first gold poured on 30 June 2021. The first shipment of gold from site to the
Company’s refiner took place in early July 2021 with 1,477 ounces of gold subsequently sold for $2,450 per ounce for
$3.6 million. Since that time the Company has undertaken regular weekly shipments of gold with sales of the outturned
product into a blend of the spot gold market or forward contract prices.
* The comparative information has been restated on account of correction of errors. Refer to Note 34.
Corporate
In February 2021 the Company completed a strategic investment in DiscovEx Resources Limited (ASX: DCX) via a $1.2
million share placement. DCX holds controlling interests in the Sylvania Project tenement, an extensive 2,247km2, highly
prospective package located adjacent to Capricorn’s KGP. Upon completion of the share placement Capricorn became a
substantial shareholder of DCX, holding a 11.68% interest with Capricorn CEO Kim Massey joining the DCX board as a
non-executive director.
In May 2021 Mr Bernard De Araugo was appointed to the Board of Capricorn as a non-executive director. Bernard is a
qualified metallurgist with over 30 years’ experience in mining and processing, including senior management and
technical roles at several gold mining operations in Australia and overseas. He has held senior leadership roles across a
range of business disciplines including operations, commercial management and technical functions at Orica Mining
Services and leading processing consumables supplier Donhad Pty Ltd where he was an executive director for over 12
years.
Following the end of the financial year the Company announced the acquisition of the Mt Gibson Gold Project, 280
kilometres north-east of Perth in the Murchison Region of Western Australia. The project has a JORC 2012 compliant
Inferred Mineral Resource Estimate of 79Mt @ 0.8g/t Au for 2,083,000 ounces of gold. The Company acquired the project
for total consideration of $39.6 million comprising a $25.6 million cash payment and $14 million paid by the issue of 7.65
million fully paid ordinary shares in Capricorn. In addition, the Company granted a 1.0% net smelter royalty on all minerals
produced from the project including gold production in excess of 90,000 ounces. The cash component of the acquisition
was funded by a $20 million extension to the Company’s debt facility and from existing cash reserves. As at the date of
this report, the Company had drawn down $90 million on the debt facility with a further $10 million available.
Response to COVID-19
On 30 January 2020, the World Health Organisation (WHO) announced that the coronavirus (“COVID-19”) outbreak was
a global health emergency and later declared it a global pandemic. The Company has followed the formal guidance from
the State and Federal health authorities by implementing measures to minimise the risk of infection and rate of
transmission of the virus.
Whilst the direct impact of COVID-19 on the Company’s operations has been minimal, border closures and lockdowns
following outbreaks around Australia continue to have an impact on Capricorn operations.
Site procedures have been established to ensure that the risk of infection and transmission of COVID-19 is minimised
including health screening of all employees, contractors and deliveries made to the mine site, social distancing protocols
and strict hygiene practices.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 5
Review of Operations (Continued)
Karlawinda Gold Project
The Karlawinda Gold Project is located in the Pilbara region of Western Australia, 65km south-east of the town of
Newman.
Figure 1: Location of the Karlawinda Gold Project
Geology
The Project area is underlain by a largely unexplored and only recently recognised belt of Archaean-aged greenstone
rocks that were discovered in 2005. This belt of predominantly volcanic and sedimentary rocks is located on the southern
margin of the Sylvania Dome, a major structure where Archaean predominantly granitic basement rocks thought to be
part of the Pilbara Craton, are exposed at surface within surrounding younger Proterozoic aged sedimentary basins.
Typically, at the KGP the bedrock geology is obscured by a thin cover of sandy soil up to 2m thick.
The Bibra deposit is part of a large-scale Archaean gold mineralising system with mineralisation hosted within a package
of deformed meta-sediments and meta volcanic rocks and is developed on four main parallel, shallow dipping structures.
Close to surface in the weathered rock, oxide gold mineralisation has been developed over the structures from surface
to a depth of approximately 60m.
Development
Construction of the KGP commenced in December 2019 and was completed in June 2021 with the successful
commissioning of the processing plant culminating in first gold poured of 386 ounces on 30 June 2021. The project was
completed in line with time and cost guidance.
The KGP processing plant throughput capacity is anticipated to be:
• 4.5 – 5.0 mtpa in the oxide/fresh ore blend in the first 3 years; and
• 4.0 – 4.5 mtpa in solely fresh rock ore in years 4 and beyond.
These throughput capacities are expected to produce a long-term production range of 110,000 to 125,000 ounces per
annum.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 6
Review of Operations (Continued)
Figure 2: Karlawinda Processing Plant
Ore processing commenced in the last week of June 2021 and has been relatively continuous since the rapid transition
from construction to operations and ultimately to first gold production.
Commissioning and optimisation activities have continued since the end of the financial year with a view to ramp up to
achieving steady state operations by the end of September 2021.
Operating results for the KGP for the limited period of operations during the 2021 financial year were as follows:
June 21Q
March 21Q
Ore mined
Waste mined
Stripping ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
‘000 BCM
‘000 BCM
w:o
‘000 t
‘000 t
g/t
%
ozs
301
1,365
4.5
649
52
1.41
95.4
2,360
-
1,215
n/a
-
-
-
-
-
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 7
Review of Operations (Continued)
Figure 3: Karlawinda Processing Plant
Mining
In October 2020 the open pit earthmoving contractor, MACA Mining Pty Ltd (“MACA”) commenced mobilising mining
equipment to site with first mining activity started in the Bibra open pit in the December 2020 quarter. During the year
3.3 million BCM of material was mined from the Bibra open pit with the majority being waste material used for
construction purposes.
At the end of the financial year a total of 648,985 tonnes of ore had been delivered to the ROM for processing. A second
excavator and truck fleet was mobilised and made operational prior to the end of the financial year in accordance with
the mining schedule. With the addition of this second fleet, mining volumes are expected to increase in the September
2021 quarter and a third mining fleet is expected to be mobilised by December 2021.
In order to provide certainty to the early stages of mining and production at the KGP, a pre-production grade control
drilling programme in the order of 45,000 metres was completed during the December 2020 quarter. This grade control
drilling delineated over 4 million tonnes of ore and is in-line with the Ore Reserve in the areas drilled. The drilling defined
the entire laterite portion of the deposit and provided confidence in the planning of mining activities and management
of mill feed for the first year of operations.
A further grade control drilling programme in the oxide zone of the deposit commenced in July 2021 and will be ongoing
over the life of the project as new areas of the pit are exposed for mining.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 8
Review of Operations (Continued)
Exploration
Figure 4: Mining at the Bibra open pit
Capricorn wholly owns a 2,052 square kilometre tenement package at KGP which includes the greenstone belt hosting
the 2.1 million ounce Resource and 1.2 million ounce Reserve Bibra gold deposit and other areas deemed highly
prospective for gold. Due to the location of the project in the Pilbara region of Western Australia (a region not historically
explored for gold), very little modern and meaningful gold exploration has been completed outside of the immediate
Bibra deposit.
Regional
During the year progress was made on several fronts towards increasing the understanding of the geological opportunity
at the KGP.
In September 2020 a high resolution (50m line spaced) aeromagnetic survey was conducted over the regional tenement
package consisting of over 36,000 line kilometres. The completed survey was merged with existing surveys to provide a
complete detailed image of the entire tenement package. This allowed a detailed structural and lithological interpretation
of the tenement package which was used as a framework for target generation (refer to Figure 5).
Extensive soil sampling and rock chip sampling programmes were completed across the regional tenement package
during the year identifying areas with geological settings prospective for gold in the Pilbara.
The results from these programmes together with field mapping, were correlated with the aeromagnetic survey to
generate high priority targets for drilling across the KGP tenement package as shown below:
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 9
Review of Operations (Continued)
Figure 5: High priority drill targets identified across tenement package
In 2018 the Company delineated a new area of prospective Archean greenstone stratigraphy at Mundiwindi
approximately 10km to the east of the Bibra deposit. In the September 2020 quarter the Company received consent from
the Jigalong Community and the Minister for Mines and Petroleum to conduct exploration activities over tenements
covering the Mundiwindi greenstone belt. The project area has not been subject to any previous on-ground exploration
and the rock types observed are interpreted to be similar to those which are seen within the host stratigraphy for the
Bibra gold deposit. This suggests both areas are of similar age and tectonic regime. A 19,000 metre aircore drill
programme commenced following year end targeting a Bibra style deposit.
Figure 6: Location of 19,000 metre aircore drill programme at Mundiwindi
First pass mapping, geophysical and geochemical programmes identified prospective targets at Stornaway, Jamie Well
and Jims West. All three projects were targeted due to their proximity to large crustal scale structures and soil sample
anomalies. Aircore drilling programmes are planned in FY2022 over these prospects.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 10
Review of Operations (Continued)
Exploration Drilling
A total of 555 holes for 32,982 metres were drilled across the tenement package during the year broken down as follows:
Drilling
AC drilling
RC drilling
Water exploration
Number of holes
Metres drilled
427
92
36
19,777m
10,260m
2,945m
All drilling during the year was in near mine programmes focused on infill and extensional drilling to the Bibra and
Southern Corridor open pits. The drilling completed was designed to convert and extend Inferred Resources within the
March 2020 Mineral Resource estimate to the higher confidence Indicated category, particularly between the current
A$1,600 Ore Reserve pit design and higher gold price open pit optimisations. Encouraging results were received during
the year including:
• 19m @ 2.46g/t from 136m in KBRC1500
• 19m @ 1.69g/t from 122m in KBRC1498
• 7m @ 1.59g/t from 48m in KBRC1456
• 4m @ 2.09g/t from 35m in KBRC1467
• 2m @ 3.68g/t from 49m in KBRC1467
• 5m @ 3.77g/t from 36m in KBRC1470
• 6m @ 1.70g/t from 54m in KBRC1472
• 1m @ 6.96g/t from 49m in KBRC1472
• 6m @ 1.33g/t from 83m in KBRC1478
Further extensional and infill drilling is planned in FY2022 and together with these results will form the basis of an update
to the Mineral Resource Estimate and Ore Reserve.
Exploration drilling during the year was restricted to areas of the tenement package that were cleared for drilling for
aboriginal heritage purposes. Completing the necessary ethnographical and archaeological surveys required to be able
to carry out meaningful scale regional exploration activities on the tenure is a continuing priority and this work has
progressed with areas cleared for exploration and water drilling necessary for the operations. This work will be ongoing
in FY2022 as the Company continues to progress extensive drilling programmes.
Material Business Risks
The material business risks of the Company include:
• COVID-19: Capricorn continues to actively respond to the ongoing COVID-19 virus currently impacting people and
businesses globally. The health and safety of people working at Capricorn, their families and our communities remains
paramount during this time. Capricorn continues to operate under protocols developed internally and as prescribed
by State and Federal health authorities to minimise risks to our people and communities and ensure we continue to
safely operate during this challenging period. The KGP is located in Western Australia which has enabled the Company
to have a dynamic, rapid, and consistent approach to the management of the COVID-19 virus.
• Gold price and foreign exchange currency: The Company is exposed to fluctuations in the Australian dollar gold price
which can impact on revenue streams from operations. To mitigate downside in the gold price, the Board has
implemented a hedging program to assist in offsetting variations in the Australian dollar gold price.
• Reserves and Resources: The Mineral Resource Estimates and Ore Reserve Estimates for the Company’s assets are
estimates only and no assurance can be given that they will be realised. The estimates are determined in accordance
with JORC and compiled or reviewed by a qualified competent person.
• Government regulation: The Company’s mining, processing, development and exploration activities are subject to
various laws and statutory regulations governing prospecting, development, production, taxes, royalty payments,
labour standards and occupational health, mine safety, toxic substances, land use, water use, communications, land
claims of local people and other matters.
No assurance can be given that new laws, rules and regulations will not be enacted or that existing laws, rules and
regulations will not be applied in a manner which could have an adverse effect on the group’s financial position and
results of operations. Any such amendments to current laws, regulations and permits governing operations and
activities of mining and exploration, or more stringent implementation thereof, could have a material adverse impact
on the Company.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 11
Review of Operations (Continued)
• Operating risk: The Company’s gold mining operations are subject to operating risks that could result in decreased
production, increased costs & reduced revenues. To manage this risk the Company seeks to attract and retain high
calibre employees and implement suitable systems and processes to ensure production targets are achieved.
• Exploration and development risk: An ability to sustain or increase the current level of production in the longer term
is in part dependent on the success of the group’s exploration activities and development projects, and the expansion
of existing mining operations. The exploration for, and development of, mineral deposits involves significant risks that
even a combination of careful evaluation, experience and knowledge may not eliminate. While the discovery of an
ore body may result in substantial rewards, few properties that are explored subsequently have economic deposits
of gold identified, and even fewer are ultimately developed into producing mines. Major expenses may be required
to locate and establish mineral reserves, to establish rights to mine the ground, to receive all necessary operating
permits, to develop metallurgical processes and to construct mining and processing facilities at a particular site.
• Climate Change: Capricorn acknowledges that climate change effects have the potential to impact our business. The
highest priority climate related risks include reduced water availability, extreme weather events, changes to legislation
and regulation, reputational risk, and technological and market changes. The group is committed to understanding
and proactively managing the impact of climate related risks to our business. This includes integrating climate related
risks, as well as energy considerations, into our strategic planning and decision making.
• Environmental: The Company has environmental liabilities associated with its tenements which arise as a consequence
including waste management, tailings management, chemical management, water
of mining operations,
management and energy efficiency. The Company monitors its ongoing environmental obligations and risks, and
implements rehabilitation and corrective actions as appropriate, through compliance with its environmental
management system.
• People risks: The Company seeks to ensure that it provides a safe workplace to minimise risk of harm to its employees
and contractors. It achieves this through an appropriate safety culture, safety systems, training and emergency
preparedness.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 12
Directors’ Report
The Directors submit the financial report of the Consolidated Group (“the Group” or “Capricorn”), consisting of Capricorn
Metals Ltd (referred to in these financial statements as “Parent” or “Company”) and its wholly owned subsidiaries for the
year ended 30 June 2021 and the audit report thereon, made in accordance with a resolution of the Board.
Directors
The Directors of the Company who held office since 1 July 2020 and up to the date of this report are set out below.
Directors were in office for the entire year unless stated otherwise.
Mr Mark Clark B.Bus, CA
Executive Chairman
Appointed 8 July 2019
Mr Mark Okeby LLM
Non-Executive Director
Appointed 8 July 2019
Mr Clark has over 30 years’ experience in corporate advisory and public company
management.
He was a Director of successful Australian gold miner Equigold NL (“Equigold”) from
April 2003 and was Managing Director from December 2005 until Equigold’s $1.2
billion merger with Lihir Gold Ltd in June 2008. He was closely involved in the
development and operation of Equigold’s gold mines in both Australia and Ivory
Coast.
Mr Clark was appointed Managing Director of Regis Resources Limited (“Regis”) in
May 2009 and Executive Chairman in November 2016. He retired as a director of
Regis in October 2018. Mr Clark oversaw the development of Regis’ three
operating gold mines at the Duketon Gold Project, which culminated in the project
producing well over 300,000 ounces of gold per annum. During this time the
company grew from a small explorer with a market capitalisation of around $40
million to a significant gold producer with a market capitalisation in the order of
$2.5 billion.
Mr Clark is a member of the Chartered Accountants Australia and New Zealand.
Mr Clark is not an independent Director.
During the past three years Mr Clark has held the following other listed company
directorships:
•
Executive Director of Regis Resources Limited (May 2009 to October 2018)
Mr Okeby began his career in the resources industry in the 1980s as a corporate
lawyer advising companies on resource project acquisitions, financing, and
development. He has a Masters of Law (LLM) and over 30 years’ experience as a
Director of ASX listed mining and exploration companies.
He is currently a Director of Red Hill Iron Limited (appointed in 2016) and previously
has been a Director of Hill 50 Ltd, Abelle Limited, Metals X Limited, Westgold
Resources Limited, Lynas Corporation Ltd and Regis Resources Limited.
Mr Okeby joined the Board of Regis in July 2009 as a Non-Executive Director and
was a major contributor on the Board that transformed Regis from a small gold
explorer to one of Australia’s largest gold producers.
Mr Okeby has a deep knowledge of the Australian resources landscape and the
regulatory regimes around mine development and operation. He also has
significant experience in the commercial and legal aspects of project development,
financing, and corporate transactions.
Mr Okeby is an independent Director.
During the past three years Mr Okeby has held the following other listed company
directorships:
• Non-Executive Director of Red Hill Iron Limited (August 2015 to present)
• Non-Executive Director of Regis Resources Limited (July 2009 to February
2019)
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 13
Directors’ Report (Continued)
Mr Myles Ertzen B.Sc Grad Dip
App Fin
Non-Executive Director
Appointed 13 September 2019
Mr Bernard De Araugo B.App.Sc
(Metallurgy)
Non-Executive Director
Appointed 26 May 2021
Mr Ertzen was from 2009 until December 2018 a senior executive at Regis
Resources Limited having had project and business development roles, culminating
in the role of Executive General Manager – Growth, from which he resigned in
December 2018. Prior to Regis, Myles held a number of senior operations roles for
gold mining and development companies and has significant experience in the
permitting, development and operations of gold projects in Western Australia.
Myles has various regulatory and technical qualifications in mining, management
and finance.
Mr Ertzen is an independent Director.
During the past three years Mr Ertzen has not held any other listed company
directorships.
Mr De Araugo is a qualified metallurgist with over 30 years’ experience in mining
and processing including senior management and technical roles at several gold
mining operations in Australia and overseas. He has held senior leadership roles
across a range of business disciplines
including operations, commercial
management and technical functions at Orica Mining Services and leading
processing consumables supplier Donhad Pty Ltd where he was an executive
director for over 12 years.
Mr De Araugo is an independent Director.
During the past three years Mr De Araugo has not held any other listed company
directorships.
Company Secretary
The Company Secretaries of the Company during the year and up to the date of this report are set out below.
Mr Kim Massey B.Com, CA
Company Secretary
Appointed 4 March 2021
Mr Kim Massey was appointed as Company Secretary on 4 March 2021.
Mr Massey is a Chartered Accountant with significant experience in financial
management and corporate advisory services, particularly in the resources sector,
as a corporate advisor and company secretary for a number of ASX and AIM listed
companies.
Ms Tammie Dixon B.Com, CPA
Company Secretary
Appointed 13 September 2019
Resigned 4 March 2021
Ms Dixon was appointed as Company Secretary effective 15 November 2019.
Ms Dixon is a Certified Practising Accountant with significant experience in financial
management in the resources sector. She has held senior management roles with
several ASX listed companies.
Ms Dixon resigned as Company Secretary on 4 March 2021.
Nature of Operations and Principal Activities
The principal activities of Capricorn during the financial year were the exploration, evaluation and development of the
Karlawinda Gold Project. In June 2021 the Group commenced gold production at the Karlawinda Gold Project.
Dividends Paid or Recommended
No dividends were paid or recommended to be paid during the financial year (2020: Nil).
Operating Results
The net loss attributable to members of the parent entity after providing for income tax amounted to $4,765,000
(Restated* 2020: $17,947,000). A review of the Group's operations during the year and the results of those operations
are contained in the Review of Operations section of this Annual Report from page 4.
Financial Position
The net assets of the Group for the year ended 30 June 2021 were $130,460,000 (Restated* 2020: $95,508,000). Net
assets have increased significantly due to the continued development of the Karlawinda Gold Project which was funded
by existing cash reserves, debt and equity issued during the year.
The Directors believe the Group is in a financial position to progress its current objectives and strategies.
* The comparative information has been restated on account of correction of errors. Refer to Note 34.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 14
Directors’ Report (Continued)
Future Developments
Likely future developments in the operations of the Group are referred to in the Review of Operations section of this
Annual Report. There are no likely developments of which the Directors are aware which could be expected to
significantly affect the results of the Group’s operations in subsequent financial years not otherwise disclosed in the
Principal Activities and Operating and Financial Review or the Significant Events after the Balance Date sections of the
Directors’ Report.
Environmental Issues
Mining and exploration operations in Australia and Madagascar are subject to environmental regulation under the laws
of each country and the State of Western Australia. The Group holds various environmental licences issued under these
laws, to regulate its mining and exploration activities. The Group’s current activities generally involve disturbance
associated with exploration drilling programmes in Australia, with only low-level activities in Madagascar.
All environmental performance obligations are monitored by the Board of Directors and subjected from time to time to
Government agency audits and site inspections. There have been no material breaches of the Group’s licenses and all
mining and exploration activities have been undertaken in compliance with the relevant environmental regulations.
Significant Changes in State of Affairs
Other than as set out below and elsewhere in the report, there were no significant changes in the state of affairs.
Events Subsequent to Reporting Date
There were no material events arising subsequent to 30 June 2021, to the date of this report which may significantly
affect the operations of the Group, the results of those operations and the state of affairs of the Group in the future,
other than:
Acquisition of Mt Gibson Gold Project
On 28 July 2021 the Company announced the acquisition of the Mt Gibson Gold Project which includes a JORC compliant
Inferred Mineral Resource Estimate of 79Mt @ 0.8g/t for 2,083,000 ounces of gold as well as various prospective mining
tenements, associated information, infrastructure, improvements and associated environmental obligations.
The acquisition also involved the assumption of a third party royalty of $10 per ounce of gold produced in excess of 20,000
ounces from certain tenements and the granting of a 1% net smelter royalty over the entire project on all mineral
production including gold in excess of 90,000ozs.
The total consideration for the acquisition was $39.6 million comprised of $25.6 million in cash, from existing cash
reserves and funding facilities, plus $14 million settled via the issue of 7.65 million shares in the Company.
Extension of loan facility
In July 2021 the Company finalised a $20 million extension to the Company’s $80 million Macquarie Bank Limited
(“Macquarie”) debt facility on similar terms to assist with the funding of the Mt Gibson Gold Project of which $90 million
is drawn.
Exercise of options
On 28 July 2021 the Company announced the issue of 10 million shares as a result of the exercise of 10 million options at
an exercise price of $0.60 per share by directors of the Company.
Directors’ Meetings
During the financial year, the Directors’ attendance at meetings of Directors and committees of Directors were as follows:
Director
M Clark
M Okeby
M Ertzen
B De Araugo
CAPRICORN METALS LTD ABN 84 121 700 105
Directors’ Meetings
Number of
meetings held
Number of
meetings
attended
9
9
9
1
9
9
9
1
Page | 15
Directors’ Report (Continued)
Directors’ Interests
As at the date of this report, the interests of the Directors in shares and options of the Company are set out in the table
below:
Director
M Clark
M Okeby
M Ertzen
B De Araugo
Share Options
Unissued shares
Number of
shares
22,052,000
6,615,385
3,611,539
45,550
Number of
unquoted
options
-
-
-
-
At the date of this report, the Company had no unissued shares under listed and unlisted options.
A total of 10,000,000 options were exercised after year end but before the date of this report.
Shares issued on exercise of options
At the date of this report, 16,218,006 ordinary shares were issued by the Company as a result of the exercise of options
at a weighted average exercise price of $0.73 per share.
During the year 6,218,006 options were exercised and an additional 10,000,000 options were exercised after year end
but before the date of this report.
Performance Rights
Unissued shares
At the date of this report, the Company had the following unissued shares under unvested performance rights.
Vesting date
17 September 2021
17 September 2022
1 February 2022
1 February 2023
30 September 2022
30 September 2023
18 January 2023
18 January 2024
29 March 2023
29 March 2024
Number outstanding
2,000,000
2,000,000
1,225,000
1,225,000
162,500
162,500
100,000
100,000
100,000
100,000
Performance rights holders do not have any right, by virtue of the performance rights to participate in any share issue of
the Company or any related body corporate.
Details of performance rights granted to directors and other key management personnel during the year are set out in
the remuneration report.
Auditor Independence and Non-Audit Services
No fees were paid or payable to KPMG Australia for non-audit services during the year ended 30 June 2021 (2020: Nil).
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 for the
year ended 30 June 2021 is attached to the Directors’ Report at page 26.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 16
Directors’ Report (Continued)
Indemnification and Insurance of Directors and Officers
The Company has established an insurance policy insuring Directors and officers of the Company against any liability
arising from a claim brought by a third party against the Company or its Directors and officers, and against liabilities for
costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in their
capacity as a Director or officer of the Company, other than conduct involving a wilful breach of duty in relation to the
Company.
In accordance with a confidentiality clause under the insurance policy, the amount of the premium paid to insurers will
not be disclosed. This is permitted under s300(9) of the Corporation Act 2001.
No indemnity has been obtained for the auditor of the Group.
Proceedings on behalf of the Company
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings
to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or any part of
those proceedings.
Rounding Off
The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Director’s Reports) Instrument 2016/191
and in accordance with that Instrument, amounts in the consolidated financial statements and director’s report have
been rounded off to the nearest thousand dollars, unless otherwise stated.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 17
Remuneration Report (Audited)
This remuneration report for the year ended 30 June 2021 outlines the remuneration arrangements of the Company and
the Group in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This
information has been audited as required by section 308(3C) of the Act.
The report details the nature and amount of remuneration for each Key Management Personnel (“KMP”) of Capricorn
Metals Ltd.
Remuneration Principles
The remuneration policy was approved by the Board. Executives receive a base salary, superannuation, fringe benefits,
performance incentives and retirement benefits as relevant or appropriate to their position. The Board reviews executive
packages annually by reference to Group performance, executive performance, comparable information from industry
sectors and other listed companies and independent advice. The performance of executives is reviewed annually, by the
Board.
Executives may be granted unquoted share options or performance rights from time to time, as determined by the Board.
The Board expects that the remuneration structure implemented will result in the Group being able to attract and retain
executives to manage the Group. It will also provide executives with the necessary incentives to work towards sustainable
growth in shareholder value.
The payment of bonuses, options and other incentive payments are reviewed by the Board annually as part of the review
of executive remuneration. The Board can exercise its discretion in relation to approving incentives, bonuses and options.
Any changes must be justified by reference to measurable performance criteria.
Fixed remuneration
Fixed remuneration consists of base remuneration (including fringe benefits tax charges related to employee benefits),
as well as employer contributions to superannuation funds and salary sacrifice superannuation contributions.
Short term incentives
Each year the Board reviews the performance of the Group and KMP and makes recommendations in relation to the
awarding of any short-term incentives. No such bonuses have been recommended this year.
Long term incentives
The Board has established the Employee Incentive Plan (“Incentive Plan”) as a means for motivating senior employees to
pursue the long-term growth and success of the Group. The Incentive Plan provides the Group the flexibility to issue
incentives in the form of either options or performance rights which may ultimately vest and be converted to shares on
exercise, subject to satisfaction of any relevant vesting conditions. The ability to exercise the options or performance
rights is conditional upon the employee remaining with the Group throughout the vesting period. There are no other
performance criteria that must be met.
Non-Executive Directors
Total remuneration for all Non-Executive Directors, last voted upon by shareholders at the 2019 Annual General Meeting,
is not to exceed $400,000 per annum. Directors’ fees cover all main Board activities and committee memberships. The
base fee for a Non-Executive Director increased from $40,000 to $100,000 per annum excluding superannuation on 1
October 2020. From time to time, Non-Executive Directors may provide additional services to the Company and in these
cases, they are paid fees in line with industry rates.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 18
Remuneration Report (Audited) (Continued)
Key Management Personnel
The following table outlines the movements in KMP during the year ended 30 June 2021.
Name
Position
Mr Mark Okeby
Non-Executive Director
Mr Myles Ertzen
Non-Executive Director
Mr Bernard De Araugo (1)
Non-Executive Director
Mr Mark Clark
Executive Director
Mr Kim Massey (2)
Chief Executive Officer & Company Secretary
Mr Paul Thomas
Chief Operating Officer
Ms Tammie Dixon (3)
Chief Financial Officer & Company Secretary
(1) Mr De Araugo was appointed Non-Executive Director effective 26 May 2021.
(2) K Massey was appointed Company Secretary effective 4 March 2021.
(3) T Dixon ceased as Chief Financial Officer and Company Secretary effective 4 March 2021.
The following table outlines the termination provisions for each current KMP:
Term as KMP
Full Year
Full Year
Part Year
Full Year
Full Year
Full Year
Part Year
Mark Clark, Executive Director
Notice Period by Capricorn:
- With or without reason
- Serious misconduct
Notice Period by Executive:
Fundamental change:
Kim Massey, Chief Executive Officer
Notice Period by Capricorn:
- With or without reason
- Serious misconduct
Notice Period by Executive:
Fundamental change:
Paul Thomas, Chief Operating Officer
Notice Period by Capricorn:
- With or without reason:
- Serious misconduct:
Notice Period by Executive:
Fundamental change:
Notice period
Payment in lieu
of notice
Entitlement to
options and rights on
termination
2 months
Up to 2 months
Nil
Nil
2 months
Up to 2 months
n/a
n/a
6 months
Up to 6 months
Nil
3 months
1 month
Nil
3 months
12 months
6 months
Up to 6 months
Nil
3 months
1 month
Nil
3 months
12 months
(1)
As above
n/a
(1)
As above
n/a
(1)
As above
n/a
(1) Due to resignation or termination for cause, any unvested rights and options will automatically lapse on the date of the cessation of
employment. For those performance rights or options that have vested, they lapse one (1) month after cessation of employment. These terms
can be extended at the Board’s discretion.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 19
Remuneration Report (Audited) (Continued)
Remuneration for Key Management Personnel of the Group during the year ended 30 June 2021
Short term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
FY2021
Salary and Fees
Other
Service Fees
Non-Cash
Benefits*
Superannuation
Accrued annual
& long service
leave #
Options &
Rights
Termination
Payments
Non-Executive Directors
M Okeby (1)
M Ertzen
B De Araugo (2)
Executive Directors
M Clark
Other Executives
K Massey
P Thomas
T Dixon (3)
Total
$
$
85,000
85,000
9,872
347,481
358,250
358,250
159,103
26,190
-
-
-
-
-
-
$
-
-
-
$
10,563
8,075
938
$
-
-
-
7,031
25,000
13,278
$
-
-
-
-
7,031
7,031
4,508
25,000
25,000
24,615
7,599
34,228
(12,494)
1,081,683
1,081,683
155,884
$
-
-
-
-
-
-
100,000
Performance
Related
(LTI)
%
-
-
-
-
Total
$
121,753
93,075
10,810
392,790
1,479,563
1,506,192
431,616
73.11%
71.82%
36.12%
1,402,956
26,190
25,601
119,191
42,611
2,319,250
100,000
4,035,799
Long term benefits for accrued annual and long service leave are the movements in the provision, net of any leave taken.
* Non-monetary benefits are presented at actual cost plus any fringe benefits tax paid or payable by the Company.
#
(1) The other service fees include additional consulting services provided by M Okeby during his appointment as Non-Executive Director to the Company.
(2) B De Araugo was appointed as a Non-Executive Director on 26 May 2021.
(3) T Dixon ceased as Chief Financial Officer and Company Secretary effective 4 March 2021.
(4) Mr Clark, Mr Massey and Mr Thomas elected to receive a portion of their superannuation entitlements above the statutorily required maximum amount as salary.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 20
Remuneration Report (Audited) (Continued)
Remuneration for Key Management Personnel of the Group during the year ended 30 June 2020
Short term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
FY2020
Salary and Fees
Other
Service Fees
Non-Cash
Benefits*
Superannuation
Accrued annual
& long service
leave #
Options &
Rights
Termination
Payments
Non-Executive Directors
M Okeby (1)
M Ertzen (2)
Executive Directors
M Clark (3)
Other Executives
K Massey (4)
P Thomas (5)
T Dixon (6)
$
$
39,247
32,000
335,415
301,454
285,521
139,247
110,060
-
-
-
-
-
$
-
-
$
13,225
3,040
$
-
-
$
1,376,800
-
8,011
24,644
6,293
5,507,200
6,445
6,109
-
22,854
21,340
13,228
20,410
23,550
12,494
545,478
545,478
40,572
Total
1,132,884
110,060
20,565
98,331
62,746
8,015,528
$
-
-
-
-
-
-
-
Performance
Related
(LTI)
%
Total
$
1,539,332
35,040
89.44%
-
5,881,563
93.63%
60.84%
61.85%
19.74%
896,641
881,998
205,541
9,440,115
Long term benefits for accrued annual are the movements in the provision, net of any leave taken.
* Non-monetary benefits are presented at actual cost plus any fringe benefits tax paid or payable by the Company.
#
(1) M Okeby was appointed as a Non-Executive Director effective 8 July 2019. The other service fees include additional services provided by M Okeby during his appointment as Non-Executive Director to the Company.
(2) M Ertzen was appointed as a Non-Executive Director effective 13 September 2019.
(3) M Clark was appointed as an Executive Director effective 8 July 2019.
(4) K Massey was appointed as Chief Executive Officer effective 16 September 2019.
(5) P Thomas was appointed as Chief Operating Officer effective 1 October 2019.
(6) T Dixon was appointed as Chief Financial Officer effective 21 October 2019 and Joint Company Secretary effective 15 November 2019.
(7) Mr Clark, Mr Massey and Mr Thomas elected to receive a portion of their superannuation entitlements above the statutorily required maximum amount as salary.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 21
Remuneration Report (Audited) (Continued)
Equity issued as part of remuneration
All rights and options refer to rights and options over ordinary shares of Capricorn Metals Ltd, which are exercisable on a
one-for-one basis.
Options
No options have been granted to KMPs as compensation during the current financial year.
The table below outlines the movements in options during the year.
Name
Grant date
Number held as at 1 July 2020
Fair value at grant date
Exercise price per option
Vesting date
Expiry date
Vested and exercisable
Exercised during the year
M Clark
27 Aug 19
8,000,000
$1.225
$0.60
27 Aug 19
30 Aug 22
8,000,000
-
M Okeby
27 Aug 19
2,000,000
$1.225
$0.60
27 Aug 19
30 Aug 22
2,000,000
-
Total
10,000,000
10,000,000
-
Number held as at 30 June 2021
8,000,000
2,000,000
10,000,000
These options expire at their expiry date and are vested. All other options expire at the earlier of their expiry date or
termination of the individual’s employment unless otherwise specified in the employment contract. Options granted as
compensation do not have any vesting conditions other than continuing employment. These options were fully expensed
at the time of vesting in 2019.
Performance Rights
No performance rights have been granted to KMPs as compensation during the current financial year.
The table below outlines the terms and conditions of the performance rights held by KMP.
Key management personnel
Grant date
Tranche
Number of rights
Value of underlying security at grant date
Dividend yield
Risk free rate
Volatility
Performance period (years)
Test date
K Massey
17-Dec-19
P Thomas
17-Dec-19
Tranche A
1,000,000
Tranche B
1,000,000
Tranche A
1,000,000
Tranche B
1,000,000
$1.18
-
0.80%
105%
1.75
$1.18
-
0.77%
126%
2.75
$1.18
-
0.80%
105%
1.75
$1.18
-
0.77%
126%
2.75
17 Sep 21
17 Sep 22
17 Sep 21
17 Sep 22
Remaining performance period (years)
0.22
1.22
0.22
1.22
Expense recognised during the period
$1,081,683
$1,081,683
Performance rights granted as compensation do not have any vesting conditions other than continuing employment and
there are no market performance conditions attached to the vesting of the performance rights. The value of rights
granted is the fair value of the rights calculated at the grant date. The total value of the rights granted is $4,720,000. This
amount is allocated to remuneration over the vesting period (i.e. in years 1 July 2019 to 30 June 2023). The total
performance rights expense recognised for KMP during the year is $2,163,366. No performance rights vested and were
eligible to be exercised during the year.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 22
Remuneration Report (Audited) (Continued)
Movements in share holdings
The movement during the reporting period in the number of ordinary shares in the Company held, directly, indirectly or
beneficially, by KMP, including their related parties, is as follows:
Held as at
1 July 2020
Issued on exercise
of options
Net change
other*
Held as at
30 June 2021
Non-Executive Directors
M Okeby
M Ertzen
B De Araugo (1)
Executive Directors
M Clark
Other Executives
K Massey
P Thomas
T Dixon (2)
Total
4,615,385
3,611,539
n/a
13,846,154
2,153,847
4,307,693
25,000
28,559,618
-
-
-
-
-
-
-
-
-
-
45,550
4,615,385
3,611,539
45,550
205,846
14,052,000
-
(7,693)
(25,000)
2,153,847
4,300,000
n/a
218,703
28,778,321
* Unless stated otherwise, “Net change other” relates to on market purchases and sales of shares.
(1) B De Araugo was appointed as Non-Executive Director effective 26 May 2021. He held 45,550 shares at that date.
(2) T Dixon ceased as Chief Financial Officer and Company Secretary effective 4 March 2021. She held 32,000 shares at that date.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 23
Remuneration Report (Audited) (Continued)
Movements in options and rights over equity instruments
The movement during the reporting period in the number of options and performance rights over ordinary shares in the Company held, directly, indirectly or beneficially, by KMP,
including their related parties is as follows:
Held as at
1 July 2020
Granted as
remuneration
Exercised
Net change
other
Held as at
30 June 2021
Total vested
Exercisable
Not exercisable
Options
M Clark
M Okeby
Rights
K Massey
P Thomas
T Dixon (3)
8,000,000
2,000,000
2,000,000
2,000,000
400,000
Total
14,400,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(400,000)
8,000,000
2,000,000
8,000,000
2,000,000
8,000,000
2,000,000
-
-
2,000,000
2,000,000
n/a
-
-
-
-
-
-
2,000,000
2,000,000
-
(400,000)
14,000,000
10,000,000
10,000,000
4,000,000
(1) Unvested options are forfeited immediately on cessation of employment.
(2) Vested options lapse 30 days after the cessation of employment, if the options have not been exercised prior.
(3) T Dixon ceased as Chief Financial Officer and Company Secretary effective 4 March 2021.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 24
Remuneration Report (Audited) (Continued)
Related Party Transactions with Key Management Personnel
Loans to Key Management Personnel and their related parties
There were no loans made to any Director, KMP and/or their related parties during the current or prior years.
Other transactions with Key Management Personnel
No Director has entered into contracts with the Group since the end of the previous financial year and there were no
material contracts involving Directors’ interests existing at year end. Transactions between related parties are on usual
commercial terms and on conditions no more favourable than those available to other parties unless otherwise stated.
Other than the ordinary accrual of personnel expenses at balance date and transactions disclosed above, there are no
other amounts receivable from and payable to KMP and their related parties.
Company Performance
The following table shows the gross revenue, profits, dividends and share price at the end of financial year for the past
five financial years ending 30 June:
Revenue
Net profit/(loss)
Share price at year-end
Dividends paid
Total assets
Net assets
2017
$’000
426
(3,293)
0.081
-
31,924
30,108
2018
$’000
242
(3,118)
0.066
-
37,388
35,984
2019
$’000
207
(23,817)
0.089
-
26,284
23,817
Restated*
2020 (1)
$’000
122
(17,947)
1.795
-
2021
$’000
110
(4,765)
1.900
-
124,486
95,508
299,595
130,460
*
The comparative information has been restated on account of correction of errors. Refer to Note 34.
(1) A share consolidation of one for every five shares was approved by shareholders in November 2019.
The Board does not consider earnings during the current and previous four financial years when determining, and in
relation to, the nature and amount of remuneration of KMP.
- END OF AUDITED REMUNERATION REPORT -
Signed in accordance with a resolution of the Board of Directors.
Mr Mark Clark
Executive Chairman
Perth, Western Australia
29 September 2021
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 25
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Capricorn Metals Ltd
I declare that, to the best of my knowledge and belief, in relation to the audit of Capricorn Metals Ltd
for the financial year ended 30 June 2021 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPM_INI_01
KPMG
R Gambitta
Partner
Perth
29 September 2021
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 26
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2021
Revenue
Other income
Fair value gain/(loss) on financial assets
Personnel costs
Share-based payment expense
Depreciation
Administrative expense
Exploration expenditure written off
Impairment on asset held for sale
Reversal of impairment on receivable
Write off of payment obligation
Exploration expenditure
Finance income/(expenses)
Total expenses
Loss before income tax expense
Income tax expense
2021
$’000
110
110
420
(3,619)
(3,277)
(215)
(1,399)
-
-
-
323
(4)
2,786
(4,875)
Restated*
2020
$’000
122
173
(60)
(3,315)
(8,237)
(192)
(1,084)
(266)
(200)
11
-
(19)
(4,880)
(18,069)
(4,765)
(17,947)
-
-
Note
2
2
9
3
24
3
13
10
3
4
Net loss attributable to members of the parent entity
(4,765)
(17,947)
Other comprehensive income:
Items that may be re-classified to profit or loss:
- Adjustment from translation of foreign controlled entities
Total comprehensive loss for the year attributable to members of the parent
entity
Earnings per share:
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
(149)
(6)
(4,914)
(17,953)
23
23
(1.39)
(1.39)
(5.95)
(5.95)
*
The comparative information has been restated on account of correction of errors. Refer to Note 34.
The accompanying notes form part of these financial statements
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 27
Consolidated Statement of Financial Position
For the year ended 30 June 2021
Current assets
Cash and cash equivalents
Receivables
Other assets
Inventories
Financial assets
Assets classified as held for sale
Total current assets
Non-current assets
Other assets
Plant and equipment
Right of use assets
Deferred exploration and evaluation costs
Mine properties under development
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Borrowings
Provisions
Derivatives
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
5
6
7
8
9
10
7
11
12
13
14
15
16
17
18
16
17
18
19
20
21
22
2021
$’000
10,312
1,325
1,502
14,065
1,688
2,500
31,392
4,516
1,075
51,591
2,698
208,323
268,203
Restated*
2020
$’000
45,695
1,757
539
69
68
2,700
50,828
5,752
869
218
542
66,277
67,906
299,595
124,486
18,945
7,452
32,000
569
58,966
43,603
38,000
21,483
7,083
110,169
12,691
134
-
475
13,300
119
-
3,839
10,720
14,678
169,135
27,978
130,460
96,508
180,629
10,647
(60,816)
130,460
145,040
8,719
(57,251)
95,508
*
The comparative information has been restated on account of correction of errors. Refer to Note 34.
The accompanying notes form part of these financial statements
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 28
Consolidated Statement of Changes in Equity
For the year ended 30 June 2021
Balance as at 1 July 2019
Loss for the year
Other comprehensive income
Total comprehensive income as previously stated*
Impact of restatement
Total comprehensive income restated
Issue of shares
Cost of capital raised
Share based payments
Balance as at 30 June 2020
Balance as at 1 July 2020
Loss for the year
Other comprehensive income
Total comprehensive income
Issue of shares
Cost of capital raised
Share based payments
Transfer
Balance as at 30 June 2021
Note
34
20
20
24
20
20
24
21
Issued
capital
$’000
Accumulated
losses
$’000
62,633
(39,304)
-
-
-
-
-
84,630
(2,223)
-
145,040
(12,979)
-
(12,979)
(4,968)
(17,947)
-
-
-
(57,251)
145,040
(57,251)
-
-
-
36,836
(1,247)
-
-
180,629
(4,765)
-
(4,765)
-
-
-
1,200
(60,816)
Foreign currency
translation
reserve
$’000
(697)
-
(6)
(6)
-
(6)
-
-
-
(703)
(703)
-
(149)
(149)
-
-
-
(852)
Share-based
payment
reserve
$’000
1,185
-
-
-
-
-
-
-
8,237
9,422
9,422
-
-
-
-
-
3,277
(1,200)
11,499
*
The comparative information has been restated on account of correction of errors. Refer to Note 34.
The accompanying notes form part of these financial statements
CAPRICORN METALS LTD ABN 84 121 700 105
Total
$’000
23,817
(12,979)
(6)
(12,985)
(4,968)
(17,953)
84,630
(2,223)
8,237
96,508
96,508
(4,765)
(149)
(4,914)
36,836
(1,247)
3,277
-
130,460
Page | 29
Consolidated Statement of Cash Flows
For the year ended 30 June 2021
Cash flows from operating activities
Payments to suppliers and employees
Payments for exploration expenditure
Interest received
Interest paid
Other income
Note
2021
$’000
2020
$’000
(18,294)
(4,646)
(4)
177
(994)
218
-
648
(579)
295
Net cash used in operating activities
25
(18,897)
(4,282)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for investments
Payments for capitalised exploration expenditure
Payments for mine properties under development
Net cash used in investing activities
Cash flows from financing activities
Proceeds received from the issue of shares
Costs of capital raised
Proceeds from borrowings
Repayment of lease liabilities
Transaction costs from borrowings
Net cash flows provided by financing activities
(385)
(1,200)
(2,750)
(117,118)
(121,453)
36,836
(1,243)
70,000
(626)
-
104,967
(580)
-
(3,544)
(35,647)
(39,771)
84,630
(2,223)
-
(94)
(1,605)
80,708
Net increase/(decrease) in cash held
(35,383)
36,655
Cash and cash equivalent at the beginning of the year
Effect of exchange rates on cash holdings in foreign currencies
Cash and cash equivalents at the end of the year
5
5
45,695
-
10,312
9,040
-
45,695
The accompanying notes form part of these financial statements
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 30
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
1A. Reporting entity
Capricorn Metals Ltd is a for profit company limited by shares, incorporated and domiciled in Australia, whose shares are
publicly traded on the Australian Securities Exchange.
The Company’s registered office and principal place of business is:
Level 1, 28 Ord Street
WEST PERTH WA 6005
The nature of the operations and principal activities of the Company and its subsidiaries are described in the Directors
Report.
1B. Basis of preparation
The consolidated financial statements for the year ended 30 June 2021, comprises Capricorn Metals Ltd (“Company” or
“Parent”) and its wholly owned subsidiaries (“the Group” or “Capricorn”).
The consolidated financial statements were authorised for issue by the Board of Directors on 29 September 2021.
The consolidated financial statements are general purpose financial statements which:
• have been prepared in accordance with Australian Accounting Standards adopted by the Australian Accounting
Standards Board (”AASB”) and the Corporations Act 2001. The consolidated financial statements comply with
International Financial Reporting Standards adopted by the International Standards Board;
• have been prepared on a historical costs except for assets and liabilities and share based payments which are required
•
•
to be measured at fair value;
are presented in Australian dollars with all values rounded to the nearest thousand ($’000) unless otherwise stated in
accordance with ASIC Instrument 2016/191;
adopts all new, revised and amended Accounting Standards and Interpretations issued by the AASB that are
mandatory for the current reporting period (See details below); and
• presents reclassified comparative information where required for consistency with the current year’s presentation.
Restatement
The comparative information has been restated on account of correction of errors. Refer to Note 34.
1C. New standards and interpretations adopted
The Group has consistently applied the accounting policies to all periods presented in the financial statements. The Group
has considered the implications of new and amended Accounting Standards applicable for annual reporting periods
beginning after 1 July 2020 but determined that their application to the financial statements is either not relevant or not
material.
1D. New standards and interpretations issued but not yet effective
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2021
reporting periods and have not been early adopted by the group. The Group’s assessment of the impact of these new
standards and interpretations is that they would not have a material impact on the entity in the current or future reporting
periods and on foreseeable future transactions except for the following:
AASB 116 Property, Plant and Equipment
The amendment requires an entity to recognise the sales proceeds from selling items produced while preparing property,
plant and equipment for its intended use and the related costs in profit or loss, instead of deducting the amounts received
from the cost of the asset.
The Group plans to adopt this amendment from 1 July 2021 and expects it to have a material impact on the presentation
of net profit after tax, net assets and financial position for the year ending 30 June 2022.
1E. Accounting Policies
(a) Principles of consolidation
The consolidated financial statements incorporate the financial statements of the Parent and Entities controlled by the
Parent (its subsidiaries). The parent controls an entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity.
A list of the subsidiaries is provided in Note 31.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 31
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
The financial statements of the subsidiaries are prepared for the same reporting period as the parent entity, using
consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses
and profit and losses resulting from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group.
(b) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less.
(c) Receivables
Receivables include amounts due from customers for services performed in the ordinary course of business. Receivables
expected to be collected within 12 months of the end of the reporting period are classified as current assets. Other
receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest
method, less any provision for impairment.
The Group applies the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Receivables are recognised at amortised cost, less any allowance for expected credit losses.
(d)
Inventories
Gold bullion, gold in circuit and ore stockpiles are physically measured or estimated and valued at the lower of cost and
net realisable value. Cost is determined by the weighted average method and comprises direct purchase costs and an
appropriate portion of fixed and variable overhead costs, including depreciation and amortisation, incurred in converting
ore into gold bullion. Net realisable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and costs of selling the final product, including royalties.
Consumable stores are valued at the lower of cost and net realisable value. The cost of consumable stores is measured
on a first-in first-out basis.
Inventories expected to be sold (or consumed in the case of stores) within 12 months after the balance sheet date are
classifies as current assets, all other inventories are classified as non-current.
(e) Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable
that they will be recovered primarily through the sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to
sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets, except
deferred tax assets, employee benefits assets, investment property or biological assets, which continue to be measured
in accordance with the Group’s other accounting policies. Impairment losses on initial classification as held-for-sale or
held-for-distribution and subsequent gains and losses on remeasurement are recognised in profit or loss.
Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or
depreciated, and any equity-accounted investee is no longer equity accounted.
The held-for-sale property is subject to review and revalued on the basis of independent valuations. Any revaluation
adjustment to the carrying amount is recognised in other comprehensive income and accumulated in equity under the
heading of asset revaluation reserve.
(f) Property, plant and equipment
Each class of property, plant and equipment is carried at cost or fair value, less, where applicable, any accumulated
depreciation and impairment losses.
Property
Land and Buildings are measured using a revaluation model in accordance with paragraph 31 of AASB 116 Property, Plant
and Equipment. Any revaluation adjustment to the carrying amount of land and buildings is recognised in other
comprehensive income and accumulated in equity under the heading of asset revaluation reserve.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 32
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
Infrastructure, plant and equipment and furniture and equipment
The value of infrastructure, plant and equipment and furniture and equipment is measured as the cost of the asset, less
accumulated depreciation and impairment. The cost of the asset also includes the cost of assembly and replacing parts
that are eligible for capitalisation, the cost of major inspections and an initial estimate of the cost of dismantling and
removing the item from site at the end of its useful life.
Capital work in progress
The value of capital WIP is measured as the cost of the asset less impairment. The cost of the asset also includes the cost
of assembly and replacing parts that are eligible for capitalisation, the cost of major inspections and an initial estimate of
the cost of dismantling and removing the item from site at the end of its useful life.
Depreciation
Depreciation of mine specific plant, equipment, buildings and infrastructure with useful lives the same or greater than
the expected life of mine are charged to the statement of comprehensive income on a unit-of-production basis over the
life of the mine using tonnes of ore milled.
Depreciation of other assets with useful life shorter than the life of mine are charged to the statement of comprehensive
income over the assets useful life using the straight line method as follows:
Furniture and equipment
2 - 5 years
Plant and equipment
2 - 10 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of the reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses
are included in the statement of profit or loss and other comprehensive income.
(g) Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred is capitalised only when that expenditure is attributable to a defined
area of interest for which the Group has the rights to explore, evaluate and develop. Tenement acquisition costs are
initially capitalised. Costs are only carried forward to the extent that they are expected to be recouped through the
successful development of the area, sale of the respective areas of interest or where activities in the area have not yet
reached a stage, which permits reasonable assessment of the existence of economically recoverable reserves.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are
demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and
then reclassified to mine properties under development. No amortisation is charged during the exploration and
evaluation phase.
Exploration and evaluation assets are assessed for impairment if:
•
•
•
•
the period for which the right to explore in the area has expired during the period or will expire in the near future,
and is not expected to be renewed;
substantive expenditure on further exploration for and evaluation of mineral resources is neither budgeted nor
planned;
sufficient data exists to determine technical feasibility and commercial viability; and
facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of
impairment testing, exploration and evaluation assets are allocated to cash-generating units (“CGUs”) to which the
exploration activity relates. The CGU is not larger than the area of interest.
(h) Mine properties under development
Mine properties under development represents the costs incurred in preparing mines for production and includes plant
and equipment under construction and operating costs incurred before commercial production commences. These costs
are capitalised to the extent they are expected to be recouped through successful exploitation of the related mining
leases. Once production commences, these costs are transferred to property, plant and equipment and mine properties,
as relevant, and are depreciated and amortised using the units-of-production method based on the estimated
economically recoverable reserves to which they relate or are written off if the mine property is abandoned.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 33
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
(i)
Trade and other payables
Trade and Other payables are initially recognised at fair value through profit or loss and subsequently measured at
amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year
that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these
goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12
months.
(j)
Financial instruments
Recognition and initial measurement
All financial assets and financial liabilities are initially recognised when the Group becomes party to the contractual
provisions of the instrument except trade receivables which are initially recognised when they are originated.
A financial asset (excluding trade receivables), or financial liability is initially measured at fair value plus or minus
transaction costs that are directly attributable to its acquisition or issue, except where the instruments are classified ‘at
fair value through profit or loss’ (“FVTPL”), in which case transaction costs are expensed to profit or loss immediately.
Classification and subsequent measurement
Financial assets
The Group’s financial assets include cash and cash equivalents, trade and other receivables, term deposits, equity
investments and sold gold call options.
On initial recognition, a financial asset is classified as measured at:
•
•
•
at amortised cost;
‘fair value in other comprehensive income’ (“FVOCI”) – equity investment; or
FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model
for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first
reporting period following the changes.
A financial asset is measured at amortised costs if it meets both of the following conditions and is not designated as
FVTPL:
•
•
It is held within a business model whose objective is to hold assets to collect contractual cash flows; and
Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding
On initial recognition of an equity investment that is not being held for trading, the Group may irrevocably elect to present
subsequent changes to the investment’s fair value in OCI. This election is made on an investment -by-investment basis.
All financial assts not measured at amortised cost or FVOCI are measured at FVTPL. This includes all derivative financial
assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an
accounting mismatch that would otherwise arise.
Financial liabilities
The Group’s financial liabilities include trade and other payables, lease liabilities, sold gold call options and borrowings.
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as FVTPL if it is
classified as held for trading, it is a derivative or it is designated as such on initial recognition.
Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are
recognised in profit or loss.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest
expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also
recognised in profit or loss.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 34
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
Amortised cost
Amortised cost is calculated as:
the amount at which the financial asset or financial liability is measured at initial recognition;
less principal repayments;
•
•
• plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the
maturity amount calculated using the effective interest method; and
less any reduction for impairment.
•
The effective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs
and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual
term) of the financial instrument to the net carry amount of the financial asset or financial liability.
Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential
recognition of an income or expense in profit or loss.
The Group does not designate any interest in subsidiaries, associates or joint venture entities as being subject to the
requirements of accounting standards specifically applicable to financial statements.
Fair values
The carrying amounts and estimated fair values of all of the Group’s financial instruments recognised in the financial
statements are materially the same. The methods and assumptions used to estimate the fair value of the financial
instruments are disclosed in the respective notes.
Derecognition
Financial assets
The Group derecognises a financial asset when:
•
•
the contractual rights to receive the cash flows from the financial asset expire; or
it transfers the rights to receive the contractual cash flows in a transaction in which either:
-
-
substantially all of the risks and rewards of ownership of the financial asset are transferred; or
the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not
retain control of the financial asset.
Financial liabilities
The Group derecognises a financial asset when it transfers contractual obligations are discharged or cancelled or expire.
The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability
are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration
paid (including any non-cash assets transferred or liabilities assumed) is recognised in the profit or loss.
Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The
difference between the carrying value of the financial liability extinguished or transferred to another party and the fair
value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
Derivative financial instruments and hedge accounting
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
into and are subsequently remeasured to fair value.
The method of recognising any re-measurement gain or loss depends on the nature of the item being hedged. Any
changes in the fair value of a derivative instrument that does not qualify for hedge accounting are recognised immediately
in the income statement.
The Group’s derivative financial instruments include the sold gold call option which do not qualify for hedge accounting
and therefore any changes in the fair value of the sold gold call option are recognised immediately in the income
statement.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 35
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
(k) Employee benefits
Short-term employee benefits
Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee benefits are benefits
(other than termination benefits) that are expected to be settled wholly before 12 months after the end of the annual
reporting period in which the employees render the related service, including wages, salaries and annual leave
entitlements. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the
obligation is settled.
The Group’s obligations for short-term employee benefits such as wages, salaries and annual leave are recognised as a
part of current trade and other payables in the statement of financial position. The Group’s obligations for employees’
long service leave entitlements are recognised as provisions in the statement of financial position.
Other long-term employee benefits
Provision is made for employees’ long service leave entitlements not expected to be settled wholly within 12 months
after the end of the annual reporting period in which the employees render the related service. Other long-term
employee benefits are measured at the present value of the expected future payments to be made to employees.
Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee
departures and are discounted at rates determined by reference to market yields at the end of the reporting period on
corporate bonds that have maturity dates that approximate the terms of the obligations.
Any re-measurements for changes in assumptions of obligations for other long-term employee benefits are recognised
in profit or loss in the periods in which the changes occur.
The Group’s obligations for long-term employee benefits are presented as non-current provisions in its statement of
financial position, except where the Group does not have an unconditional right to defer settlement for at least 12 months
after the end of the reporting period, in which case the obligations are presented as current provisions.
As at 30 June 2021 the Group does not have any employees entitled to long service leave, or a pro-rata entitlement to
long service leave.
Defined contribution superannuation benefits
All employees of the Group, located in Australia receive defined contribution superannuation entitlements, for which the
Group pays the fixed superannuation guarantee contribution (currently 9.50% of the employee’s average ordinary salary)
to the employee’s superannuation fund of choice. All contributions in respect of employees’ defined contribution
entitlements are recognised as an expense when they become payable. The Group’s obligation with respect to
employees’ defined contribution entitlements is limited to its obligation for any unpaid superannuation guarantee
contributions at the end of the reporting period. All obligations for unpaid superannuation guarantee contributions are
measured at the (undiscounted) amounts expected to be paid when the obligation is settled and are presented as current
liabilities in the Group’s statement of financial position.
Equity-settled compensation
The Group provides benefits to employees (including Directors) of the Group in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled
transactions’) refer to Note 24.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at
which they are granted. The fair value of options is determined by an internal valuation using a Black-Scholes option
pricing model. The fair value of performance rights determined by consideration of the Company’s share price at the
grant date and consideration of the specific market vesting conditions applicable to the performance rights.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled
to the award (“Vesting Date”).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i)
the extent to which the vesting period has expired and (ii) the number of options that, in the opinion of the Directors of
the Company, will ultimately vest. This opinion is formed based on the best available information at reporting date. No
adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is
included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market condition.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 36
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled
award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as
if they were a modification of the original award.
(l) Provisions
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of time value of money and the risks specific to the liability.
A provision for site rehabilitation is recognised in respect of the estimated cost of rehabilitation and restoration of the
areas disturbed by mining activities up to the reporting date, but not yet rehabilitated.
(m) Borrowings
Interest bearing borrowings are initially measured at fair value, net of directly attributable transaction costs. After initial
recognition, interest-bearing borrowings are subsequently measured at amortised cost using the effective interest rate
method.
Borrowings which are due to be settled within 12 months after the balance sheet date are included in current borrowings
in the balance sheet even though the original term was for a period longer than 12 months or an agreement to refinance,
or to reschedule payments, on a long-term basis is completed after the balance sheet date and before the financial
statements are authorised for issue. Other borrowings to be settled more than 12 months after the balance sheet date
are included in noncurrent borrowings in the balance sheet.
(n) Leases as lessee
The nature of the Group’s leasing activities includes contracts for mining services, drilling, haulage, and power generation
contracts. Additionally, office leases and office equipment have also been included.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses
the definition of a lease in AASB 16.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available
for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged
to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of
the liability for each period. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease
term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis.
Lease liability
Lease liabilities include the net present value of the following lease payments:
Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
•
• Variable lease payments that are based on an index or a rate;
• Amounts expected to be payable by the lessee under residual value guarantees;
• The exercise price of a purchase option if the lessee is reasonably certain to exercise that option;
• Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the
lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of
the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it
will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 37
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
Right-of-use assets
Right-of-use assets are measured at cost comprising the following:
• The amount of the initial measurement of the lease liability;
• Any lease payments made at or before the commencement date less any lease incentives received;
• Any initial direct costs;
• Any restoration costs.
The right-of-use asset is subsequently depreciated using the straight-line method over the term of the lease. In addition,
the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for remeasurements of the lease
liability.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets are assets
with a replacement value of less than $5,000.
(o) Leases as a lessor
Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset are classified
as operating leases. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying
amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are
recognised as revenue in the period in which they are earned.
(p) Contributed equity
Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction
costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds
received.
(q) Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian Dollars
which is the parent entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items
measured at historical cost continue to be carried at the exchange rate at the date of the transaction.
Exchange differences arising on the translation of monetary items are recognised in the statement of profit or loss and
other comprehensive income.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that
the gain or loss is directly recognised in equity; otherwise the exchange difference is recognised in the statement of profit
or loss and other comprehensive income.
Group companies
The financial results and position of foreign operations, being activities outside of Australia, whose functional currency is
different from the Group’s presentation currency, are translated as follows:
• Assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
•
Income and expenses are translated at average exchange rates for the period, when the average rate approximates
the rate at the date of the transaction; and
• Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars
are recognised in other comprehensive income and included in foreign currency translation reserve in the statement of
financial position. These differences are recognised in the statement of profit or loss and other comprehensive income
in the period in which the operation is disposed of.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 38
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
(r) Revenue and other income
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial
assets. Revenue from Royalties are recognised upon delivery of goods to customers or to the minimum monthly
contractual amount.
Rental income is recognised on a straight line basis over the period of the lease term so as to reflect a constant periodic
return on the property.
Other revenue is recognised when it is received or when the right to receive payment is established. All revenue is stated
net of the amount of goods and services tax (GST).
Government grants are recognised when there is reasonable assurance that conditions attached to the grant will be
complied with and that the grant will be received.
(s) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other
borrowing costs have been expensed in the period in which they occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the borrowing of funds.
(t)
Impairment of assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether
there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the
assets, being the higher of the asset’s fair value less costs of disposal and value in use, is compared to the asset’s carrying
value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of profit or loss
and other comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
(u)
Income tax
The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or
disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the reporting
date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will
be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no
effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the
period when the asset is realised or liability is settled. Deferred tax is credited in profit and loss except where it relates
to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.
Deferred revenue tax assets are recognised to the extent that it is probable that future tax profits will be available against
which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no
adverse change will occur in income taxation legislation and the anticipation that the Group will derive sufficient future
assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the
law.
(v) Goods and services tax (“GST”)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is
not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST.
Cash flows are presented in the statement of cash flow on a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 39
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
(w) Value added tax (“VAT”)
Revenues, expenses and assets are recognised net of the amount of VAT, except where the amount of VAT incurred is
not recoverable from the Madagascan tax authority. In these circumstances VAT is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial position are shown inclusive of VAT.
Cash flows are presented in the statement of cash flow on a gross basis, except for the VAT component of investing and
financing activities, which are disclosed as operating cash flows.
(x) Operating segments
The Board as the Chief Operating Decision Makers (“CODM”) examines the Group’s performance from both a product
and geographic perspective.
The Group is managed primarily on the basis of geographical location as the Group’s operations inherently have different
risk profiles and performance assessment criteria.
The Board has therefore identified its two reportable segments of its business to be Australia and Madagascar.
(y) Earnings per share
Basic earnings per share (“EPS”) is calculated by dividing the income or loss attributable to the members of the Company
for reporting period, after exclusion of any costs of servicing equity other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the half year, adjusted for any bonus elements.
Diluted EPS adjusts the figures used in the determination of Basic EPS to take into account the after-tax effect of interest
recognised associated with the dilutive potential ordinary shares and the weighted average number of shares assumed
to have been issued for no consideration in relation to dilutive potential ordinary shares adjusted for any bonus elements.
1F. Key Estimates and Judgements
The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and
best available current information. Estimates assume a reasonable expectation of future events and are based on current
trends and economic data, obtained both externally and within the Group.
Key estimates
Impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to
impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined.
Impairment of investments in subsidiaries can arise where the carrying value of the asset exceeds the net asset position
of the subsidiaries and if it considered that this situation is unlikely to change in the foreseeable future an impairment is
recognised to the value of the deficit. Impairment of intangible assets is recognised upon managements’ best estimate
that the carrying value exceeds the fair value of the asset considering future cash flows and profits arising from the asset.
Share based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value of options is determined by an internal valuation using
a Black-Scholes option pricing model, using the assumptions detailed in Note 24. The fair value of performance rights is
determined by the share price at the date of valuation and consideration of the probability of the market vesting condition
being met.
Rehabilitation provision
The Group assesses site rehabilitation liabilities annually. The provision recognised is based on a market assessment of
the estimated cost of closure and reclamation of the areas using internal information concerning environmental issues in
the exploration and previously mined areas, discounted to present value. Significant estimation is required in determining
the provision for site rehabilitation as there are many factors that may affect the timing and ultimate cost to rehabilitate
sites where mining and/or exploration activities have previously taken place. These factors
include future
development/exploration activity, changes in the cost of goods and services required for restoration activity and changes
to the legal and regulatory framework. These factors may result in future actual expenditure differing from the amounts
currently provided.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 40
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
Determination of mineral resources and reserves
The Group estimates its Mineral Resources and Ore Reserves in accordance with the Australasian Code of Reporting for
Mineral Resources and Ore Reserves 2012 (the “JORC Code”). The information on mineral resources and ore reserves was
prepared by or under supervision of Competent Persons as defined under the JORC Code.
The determination of mineral resources and ore reserves impacts the accounting for asset carrying values.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves, and assumptions that are
valid at the time of estimation may change significantly when new information becomes available.
Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the
economic status of Reserves and may ultimately result in Reserves being restated.
Inventories
Net realisable value tests are performed at each reporting date and represent the estimated forecast sales price of the
gold when it’s expected to be realised, less estimated costs to complete production and bring the product to sale.
Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number of
contained gold ounces based on assay data, and the estimated recovery percentage. Stockpile tonnages are verified by
periodic surveys.
Key Judgements
Exploration and evaluation expenditure
Tenement acquisition costs are initially capitalised together with other exploration and evaluation expenditure. Costs
are only carried forward to the extent that they are expected to be recouped through the successful development of a
defined area of interest for which the Group has the rights to explore, evaluate and develop, the sale of the respective
areas of interest or where activities in the area of interest permits reasonable assessment of the existence of economically
recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
Deferred tax assets
The Directors have considered it prudent not to bring to account the deferred tax asset of income tax losses until it is
probable of deriving assessable income of a nature and amount to enable such benefit to be realised.
Held for sale assets
The held for sale property asset, reclassified from property, plant and equipment at 30 June 2017, remains unsold as at
30 June 2021. A valuation prepared by an expert is used by the Directors in the assessment of the carrying amount of the
held for sale asset and the requirement to impair the carrying value.
Commercial production
Depletion of capitalised costs for mining properties begins when pre-determined levels of operating capacity intended
by management have been reached. The determination of when a mine is in the condition necessary for it to be capable
of operating in the manner intended by management (referred to as “commercial production”) is a matter of significant
judgement.
Management considers several factors in determining when a mining property has reached levels of operating capacity
intended by management, including:
• When the mine is substantially complete and ready for its intended use;
• The mine has the ability to sustain ongoing production at a steady or increasing level;
• The mine has reached a level of pre-determined percentage of design capacity;
• Mineral recoveries are at or near the expected production level; and
• A reasonable period of testing of the mine, plant and equipment has been completed.
Once in commercial production, the capitalisation of certain mine development and construction costs ceases.
Subsequent costs are either regarded as forming part of the cost of inventory or expensed. However, any costs relating
to mining asset additions or improvements, or mineable reserve development, are assessed to determine whether
capitalisation is appropriate.
As at 30 June 2021, the Karlawinda Gold Project had not achieved commercial production.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 41
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
2.
REVENUE
Revenue
Rental income
Other Income
Government grant income
Other
Total Other Income
3.
EXPENSES
Personnel Costs
Salaries and wages
Defined contribution superannuation
Employee bonuses
Other employee benefits expense
Less: amounts capitalised (1)
Total Personnel Costs
2021
$’000
2020
$’000
110
122
100
10
110
173
-
173
2021
$’000
Restated*
2020
$’000
(10,377)
(6,087)
(924)
-
(689)
8,371
(528)
(32)
(387)
3,719
(3,619)
(3,315)
Personnel costs increased during the year as construction activities at the Karlawinda Gold Project ramped up
culminating in first gold poured in June 2021.
Depreciation
Plant and equipment depreciation (refer to Note 11)
Right of use asset depreciation (refer to Note 12)
Less: amounts capitalised (1)
Total Depreciation
Finance Income/(Expenses)
Project loan costs
Interest on lease liabilities (refer to Note 16)
Net gain/(loss) on financial instruments at fair value through profit and loss (2)
Other costs
Less: amounts capitalised (1)
Interest revenue
Total Finance Income/(Expenses)
(201)
(1,473)
1,459
(215)
(1,636)
(464)
3,638
(20)
1,126
2,644
142
2,786
(77)
(118)
3
(192)
(578)
(12)
(4,968)
-
-
(5,558)
678
(4,880)
*
The comparative information has been restated on account of correction of errors. Refer to Note 34.
(1) Capitalised personnel, depreciation and finance costs are being included as part of Mine properties under development during the construction
and commissioning stage of the Karlawinda Gold Project.
(2) The net gain/loss on financial instruments at fair value through profit or loss, refers to the movement in the fair value of an open sold gold call
option contract recognised when they were entered into on 6 January 2020. For more information on the measurement and recognition of
derivatives, refer to Note 19.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 42
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
4.
INCOME TAX
Tax expense
Amounts recognised in Profit and Loss
(a)
Current tax
Deferred tax
Total tax expense for the period
Numerical reconciliation between tax expense and pre-tax net profit or (loss)
(b)
Net profit/(loss) before tax
Corporate tax rate applicable
Income tax expense/(benefit) on above at applicable corporate rate
2021
$’000
Restated*
2020
$’000
-
-
-
-
-
-
(4,765)
30%
(1,429)
(17,947)
27.5%
(4,935)
Increase/(decrease) income tax due to tax effect of:
Non-deductible expenses
Other assessable income
Current year tax losses not recognised
Non assessable income
Movement in unrecognised temporary differences
Other deductible expenses
Deductible equity raising costs
Income tax expense/(benefit) attributable to entity
Deferred tax assets and liabilities
(c) Recognised deferred tax assets and liabilities
Deferred tax assets
Employee provisions
Other provisions and accruals
Derivative assets and liabilities
Blackhole previously expensed
Tax losses
Other
Set-off of deferred tax liabilities
Net deferred tax assets
Deferred tax Iiabilities
Prepayments
Exploration and mine properties
Inventory
Plant and equipment
Investments
Other
Set-off of deferred tax assets
Net deferred tax liabilities
(d) Unrecognised deferred tax balances
The following deferred tax assets have not been brought to account:
Deductible temporary differences
Deferred tax assets attributable to tax losses
Transaction costs on equity issue
Total unrecognised deferred tax assets
1,030
-
828
(30)
(100)
-
(299)
-
161
27
399
20
6,768
468
7,843
(7,843)
-
-
(7,557)
(192)
(67)
(26)
(1)
(7,843)
7,843
-
1,382
13,285
19
14,686
3,623
2
1,822
-
-
(512)
-
-
53
18
1,366
29
1,197
562
3,225
(3,225)
-
(23)
(3,167)
(19)
(7)
-
(9)
(3,225)
3,225
-
1,236
11,418
17
12,671
*
The comparative information has been restated on account of correction of errors. Refer to Note 34.
The tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of
these items due to a history of tax losses and will be reassessed as convincing evidence is available for which the Group
can utilise these benefits.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 43
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
5.
CASH AND CASH EQUIVALENTS
Cash at bank
6.
RECEIVABLES
GST receivable
Deposits
Fuel tax credit receivable
Interest receivable
Other receivables
Total Receivables
7.
OTHER ASSETS
Current
Gold forward asset
Prepayments
Total Current Other Assets
Non-Current
Gold forward asset
Total Other Assets
2021
$’000
10,312
2020
$’000
45,695
2021
$’000
907
324
45
1
48
1,325
2021
$’000
1,237
265
1,502
2020
$’000
1,140
363
91
36
127
1,757
Restated*
2020
$’000
-
539
539
4,516
5,752
6,018
6,291
*
The comparative information has been restated on account of correction of errors. Refer to Note 34.
The gold forward asset refers to the fair value of the premium income on sold gold call option contract entered into on 6
January 2020. The sold gold call option premium was added to the price of the Company’s gold forward contracts
(disclosed in Note 26). Subsequent measurement of the gold forward asset matures by 30 June 2025 and is held at
amortised cost.
8.
INVENTORIES
Ore stockpiles
Gold in circuit
Bullion on hand
Consumable stores
Total Inventories
2021
$’000
10,103
2,817
504
641
14,065
The increase in inventories reflects the commencement of mining activities during the financial year.
CAPRICORN METALS LTD ABN 84 121 700 105
2020
$’000
-
-
-
69
69
Page | 44
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
9.
FINANCIAL ASSETS
As at 1 July
Additions
Fair value adjustment
As at 30 June
2021
$’000
68
1,200
420
1,688
2020
$’000
128
-
(60)
68
During the year, the Group acquired 300,000,000 shares (a 11.68% holding interest) in DiscovEx Resources Limited (ASX:
DCX), via a share placement. The cost was $0.004 per share, totalling $1,200,000.
Fair value of listed shares and assumptions
BlackEarth Minerals NL
Fair value per listed share
Closing quoting bid price per share
DiscovEx Resources Limited
Fair value per listed share
Closing quoting bid price per share
10. ASSETS HELD FOR SALE
Property asset
Impairment
Translation adjustment
2021
2020
$0.094
$0.094
$0.034
$0.034
$0.005
$0.005
2021
$’000
4,500
(1,800)
(200)
2,500
n/a
n/a
2020
$’000
4,500
(1,800)
-
2,700
The Group intends to dispose of a freely held property asset located in Antanarirvo, Madagascar within the next 12
months. This property of 19,373m2 containing a number of buildings, including offices, warehouses and villa
accommodation, is a unique asset with limited potential buyers.
An annual valuation was completed by Cabinet D’Expertise Audit Techniques Et Conseils Qualities in June 2020 of
7,235,880,000 Ariary which translates to AUD $2,544,038 as at 30 June 2021 (2020: AUD$2,757,629). On the basis of the
current valuation, the Directors considered the carrying value appropriate for the year ended 30 June 2021.
The fair value of the freehold land was determined based on the market comparable approach that reflects recent
transaction prices for similar properties.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 45
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
11. PLANT AND EQUIPMENT
Infrastructure
Furniture &
Equipment
Plant &
Equipment
$’000
1,500
-
-
(1,500)
-
-
-
-
-
$’000
$’000
205
206
(62)
-
(6)
343
660
(317)
343
98
-
(15)
-
-
83
278
(195)
83
Furniture &
Equipment
Plant &
Equipment
$’000
343
196
(131)
20
-
428
876
(448)
428
$’000
83
180
(70)
441
-
634
899
(265)
634
Net carrying amount at 1 July 2019
Additions
Depreciation
Transfers to mine properties
Disposals
Net carrying amount at 30 June 2020
As at 30 June 2020
Cost
Accumulated depreciation
Net carrying amount at 30 June 2020
Net carrying amount at 1 July 2020
Additions
Depreciation
Transfers to plant and equipment
Transfers to mine properties
Net carrying amount at 30 June 2021
As at 30 June 2021
Cost
Accumulated depreciation
Net carrying amount at 30 June 2021
12. RIGHT-OF-USE ASSETS
As at 1 July
Additions to right-of-use assets
Depreciation charge for the year (refer to Note 3)
As at 30 June
Capital
WIP
$’000
-
443
-
-
-
443
443
-
443
Capital
WIP
$’000
443
109
-
(461)
(78)
13
13
-
13
2021
$’000
218
52,846
(1,473)
51,591
Total
$’000
1,803
649
(77)
(1,500)
(6)
869
1,381
(512)
869
Total
$’000
869
485
(201)
-
(78)
1,075
1,788
(713)
1,075
2020
$’000
336
-
(118)
218
Refer to accounting policy Note 1(n) Leases as lessee for details regarding right-of-use assets.
The increase in the right of use assets during the year relates to the identification of lease assets under AASB 16 in relation
to operating contracts signed at the Karlawinda Gold Project including the earthmoving, power and gas transportation
contracts.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 46
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
13. DEFERRED EXPLORATION AND EVALUATION COSTS
As at 1 July
Expenditure for the period
Exploration expenditure written off
Transfer to mine properties under development
As at 30 June
14. MINE PROPERTIES UNDER DEVELOPMENT
As at 1 July
Construction expenditure capitalised
Pre-production expenditure capitalised
Rehabilitation additions
Transfer from exploration
Transfers from plant and equipment
As at 30 June
2021
$’000
542
3,154
-
(998)
2,698
2021
$’000
66,277
103,748
20,070
17,152
998
78
208,323
Transfers from plant and equipment relate to construction expenditure on the Karlawinda Gold Project.
15. TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
Other payables
Total Trade and Other Payables
16. LEASE LIABILITIES
Current
Lease liabilities
Non-Current
Lease liabilities
Total Lease Liabilities
2021
$’000
6,100
11,200
1,645
18,945
2021
$’000
7,452
43,603
51,055
2020
$’000
12,079
3,209
(266)
(14,480)
542
2020
$’000
-
45,213
965
4,119
14,480
1,500
66,277
2020
$’000
8,408
3,295
988
12,691
2020
$’000
134
119
253
Refer to accounting policy Note 1(n) Leases as lessee for details regarding lease liabilities.
The increase in Lease liabilities during the year relates to the identification of lease assets under AASB16 in relation to
operating contracts signed at the Karlawinda Gold Project including the earthmoving, power and gas transportation
contracts.
Interest expense in relation to lease liabilities for the year ended 30 June 2021 was $464,000 (refer to Note 3).
Total cash outflows relating to leases during the year were $952,000 (2020: $108,000) comprising, principal ($626,000)
and interest ($326,000) payments.
The Group’s contracts that contain leases that are structured as variable payments are not included in the measurement
of lease liabilities under AASB 16. Variable lease payments for the year ended 30 June 2021, including non-lease
components such as labour, totalled $16,009,000 (2020: Nil).
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 47
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
Payments associated with short-term leases that have terms of 12 months or less and leases of low value assets of $5,000
or less are recognised in profit and loss. During the construction and commissioning phase of the project these costs are
recognised in pre-production costs. Total payments for the year were $1,626,000 (2020: Nil).
17. BORROWINGS
Current
Bank loans
Non-Current
Bank loans
Total Borrowings
2021
$’000
32,000
38,000
70,000
2020
$’000
-
-
-
Borrowings comprise of amounts drawn down on a Project Loan Facility of $80 Million with Macquarie Bank Limited
(“Macquarie”). The facility accrues interest at the bank bill rate plus 3% and is repayable in various instalments over a
term ending 30 June 2025 however, voluntary repayments can be made in accordance the facility agreement. The facility
includes customary liquidity and debt service covenants. The Group is in compliance with its covenants.
The bank holds a first ranking, registered fixed and floating charge over all the assets of Capricorn Metals Ltd and its
wholly owned subsidiary, Greenmount Resources Pty Ltd (owner of the Karlawinda Gold Project) as security for the
facility provided by Macquarie.
18. PROVISIONS
Current
Annual leave
Rehabilitation
Total Current Provisions
Non-Current
Long service leave
ROU asset demobilisation
Rehabilitation
Total Non-Current Provisions
Total Provisions
Provision for rehabilitation
As at 1 July
Provisions made during the year
As at 30 June
2021
$’000
487
82
569
50
244
21,189
21,483
2020
$’000
173
302
475
22
-
3,817
3,839
22,052
4,314
4,119
17,152
21,271
-
4,119
4,119
The Group assesses site rehabilitation liabilities on an annual basis.
The provision recognised is based on an assessment of the estimated cost of closure and reclamation of the areas using
internal information concerning environmental issues in the exploration and previously mined areas, discounted to
present value.
Significant estimation is required in determining the provision for site rehabilitation as there are many factors that may
affect the timing and ultimate cost to rehabilitate sites where mining and/or exploration activities have previously taken
place.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 48
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
These factors include:
•
•
•
future development/exploration activity;
changes in the costs of goods and services required for restoration activity; and
changes to the legal and regulatory framework.
These factors may result in future actual expenditure differing from the amounts currently provided.
The increase in the rehabilitation provision during the year reflects the progress made on the Karlawinda Gold Project.
19. DERIVATIVES
Sold gold call option liability
2021
$’000
7,083
Restated*
2020
$’000
10,720
*
The comparative information has been restated on account of correction of errors. Refer to Note 34.
The sold gold call option liability refers to the fair value of the sold gold call option contract entered into on 6 January
2020. Subsequent measurement of the sold gold call option contracts, which expire on 30 June 2025, is at fair value at
balance date with any changes in the fair value immediately recognised in the profit or loss.
20.
ISSUED CAPITAL
Ordinary shares - issued and fully paid
Movement in ordinary shares on issue
As at 1 July 2019
Issue of shares
Issued on exercise of options
Share consolidation (1)
Cost of capital raised
As at 30 June 2020
Issue of shares (2)
Issued on exercise of options (3)
Cost of capital raised
As at 30 June 2021
2021
$’000
2020
$’000
180,629
145,040
Number of
Shares
936,533,344
687,172,429
2,060,000
(1,298,964,300)
-
326,801,473
17,000,000
6,218,006
-
350,019,479
$’000
62,633
83,260
1,370
-
(2,223)
145,040
32,300
4,536
(1,247)
180,629
1.
2.
20 November 2019: Shareholders approved a resolution to consolidate the Group’s issued capital through the
conversion of every five existing shares into one share.
5 August 2020: 17,000,000 shares were issued at a price of $1.90 per share subsequent to the completion of a
placement to shareholders.
3. During the year ending 30 June 2021, 6,218,006 Options were exercised at various exercise prices ranging from
$0.485 to $0.750 each.
There are no preference shares on issue. Ordinary shares participate in dividends and the proceeds on winding up of the
parent entity in proportion to the number of shares held. At shareholders’ meetings each ordinary share is entitled to
one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.
The Company does not have authorised capital or par value in respect of its shares.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 49
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
21. RESERVES
As at 1 July 2019
Share-based payment transactions
Translation movement for the year
As at 30 June 2020
Share-based payment transactions
Translation movement for the year
Transfer (1)
As at 30 June 2021
Share-based
payment
reserve
Foreign
currency
translation
reserve
$’000
1,185
8,237
-
9,422
3,277
-
(1,200)
11,499
$’000
(697)
-
(6)
(703)
-
(149)
-
(852)
Total
Reserves
$’000
488
8,237
(6)
8,719
3,277
(149)
(1,200)
10,647
(1) Transfer refers to options that were either exercised, forfeited or expired in current and previous periods that have been transferred to
accumulated losses (refer to Note 22).
Share-based payments reserve
The share-based payments reserve is used to record the value of share-based payments including options and
performance rights to Directors, employees, including KMPs, as part of their remuneration.
Foreign currency translation reserve
The foreign currency translation reserve records exchange differences arising on translation of foreign controlled
subsidiaries.
22. ACCUMULATED LOSSES
As at 1 July
Loss for the year
Transfer (1)
As at 30 June
2021
$’000
(57,251)
(4,765)
1,200
(60,816)
Restated*
2020
$’000
(39,304)
(17,947)
-
(57,251)
*
The comparative information has been restated on account of correction of errors. Refer to Note 34.
(1) Transfer refers to options that were either forfeited or expired in previous periods that have been transferred from reserves (refer to Note 21).
23. EARNINGS PER SHARE
2021
$’000
Restated*
2020
$’000
Earnings used in calculating basic and diluted earnings per share
Loss attributable to members of the parent entity
(4,765)
(17,947)
Basic and diluted loss per share
Cents per share
Cents
(1.39)
Cents
(5.95)
Number
Number
Weighted average number of ordinary shares outstanding at 30 June
343,354,110
301,853,464
*
The comparative information has been restated on account of correction of errors. Refer to Note 34.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 50
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
As at 30 June 2021 there are 10,000,000 (2020: 16,218,006) unquoted options on issue.
As the Group incurred a loss for the year, the options on issue have no dilutive effect, therefore the diluted earnings per
share is equal to the basic earnings per share.
24. SHARE BASED PAYMENTS
Total expenses arising from share-based payment transactions recognised during the period were as follows:
Recognised share-based payments expense
Employee share-based payments expense
Performance rights expense
Total expense arising from share-based payment transactions
Options
2021
$’000
1
3,276
3,277
2020
$’000
6,898
1,339
8,237
On 2 July 2019 the Company agreed to issue 40,000,000 options (8,000,000 after share consolidation) to Mr Mark Clark
(Executive Chairman) and 10,000,000 options (2,000,000 after share consolidation) to Mr Mark Okeby (Non-Executive
Director) under the Group’s Incentive Option Plan subject to shareholder approval, which was obtained on 27 August
2019.
The following table outlines the number and movements in share options during the year:
Outstanding as at 1 July
Granted during the year
Exercised during the year
Share consolidation reduction
Outstanding at end of the year
Exercisable as at 30 June
2021
Number of
Options
2020
Number of
Options
16,218,006
41,390,028
-
50,000,000
(6,218,006)
(2,060,000)
-
(73,112,022)
10,000,000
16,218,006
10,000,000
16,151,339
The Weighted Average Exercise Price (“WAEP”) for the year ended 30 June 2021 is $0.7296 (30 June 2020: $0.5591).
All options refer to options over ordinary shares of Capricorn Metals Ltd which are exercisable on a one for one basis.
The fair value at grant date of the options has been estimated using the Black-Scholes option pricing formula, taking into
account the terms and conditions upon which the options were granted. The options vested immediately upon issue and
the contractual life of each option is 3 years. The inputs used to calculate the fair value of these options are set out below.
The expected volatility is based on the historic volatility (calculated based on the weighted average remaining life of the
share options), adjusted for any expected changes to future volatility due to publicly available information.
The ability to exercise the options is conditional upon the employee remaining with the Group throughout the vesting
period.
Performance Rights
In December 2019, 4,000,000 Performance rights were granted to KMP, Mr Kim Massey and Mr Paul Thomas under the
Group’s Performance Rights Plan. 50% of the rights will vest on 17 September 2021 and the remaining rights will vest on
17 September 2022.
In March 2020, 2,450,000 Performance rights were granted to employees of the Company under the Group’s
Performance Rights Plan. 50% of rights will vest on 1 February 2022 and the remaining rights will vest on 1 February 2023.
In October 2020, 325,000 Performance rights were granted to employees of the Company under the Group’s
Performance Rights Plan. 50% of rights will vest on 30 September 2022 and the remaining rights will vest on 30 September
2023.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 51
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
In June 2021, 400,000 Performance rights were granted to employees of the Company under the Group’s Performance
Rights Plan. 200,000 rights will vest in equal proportions on 18/1/2023 and 18/1/2024 and the remaining 200,000
Performance will vest in equal proportions on 29 March 2023 and 29 March 2024.
The fair value at the grant date was estimated using a Black Scholes option pricing model. The table below details the
terms and conditions of the grants and the assumptions used in estimating the fair value:
Grant date
Value at grant date
Exercise price
Dividend yield
Risk free rate
Volatility
17 Dec 2019
27 Mar 2020
19 Oct 2020
16 Jun 2021
16 Jun 2021
$1.18
nil
0%
0.77% -
0.80%
$0.95
nil
0%
0.38% -
0.39%
$1.77
nil
0%
0.13% -
0.14%
$1.94
nil
0%
0.04% -
0.14%
$1.94
nil
0%
0.04% -
0.14%
105% - 126%
107% - 123%
95% - 123%
91% - 118%
91% - 118%
Performance period (years)
1.75 - 2.75
1.85 - 2.85
1.95 - 2.95
1.59 - 2.59
1.59 - 2.59
Test date
Remaining performance period
(years)
17/09/21 &
17/09/22
1/02/22 &
01/02/23
30/09/22 &
30/09/23
18/01/23 &
18/01/24
29/03/23 &
29/03/24
1.75 - 2.75
1.85 - 2.85
1.25 - 2.25
1.55 - 2.55
1.55 - 2.55
Weighted average fair value
1.18
0.95
$1.77
$1.94
$1.94
The fair value of the Performance rights granted during the year ended 30 June 2021 was $1,351,250 (2020: $7,047,500).
The ability to exercise the performance rights is conditional upon the employee remaining with the Group throughout
the vesting period.
25. NOTE TO THE STATEMENT OF CASH FLOWS
Reconciliation of cash flow from operations, with loss after income tax:
Loss after income tax
Non-cash flows in result
Depreciation
Impairment of assets held for sale
Impairment of capitalised exploration expenditure
Write off of a payment obligation
Fair value (gain)/loss on financial assets
Share based payment
Unrealised (gain)/loss on derivatives
Loss on disposal of fixed assets
Changes in assets and liabilities
(Increase)/decrease in receivables
(Increase)/decrease in other current assets
(Increase) in inventories
Increase/(decrease) in payables and accruals
Increase in provisions
Cashflow used by operations
2021
$’000
(4,765)
215
-
-
(323)
(420)
3,277
(3,638)
-
432
273
(13,996)
(293)
341
Restated*
2020
$’000
(17,947)
192
200
266
-
60
8,237
4,968
6
(383)
(53)
-
150
22
(18,897)
(4,282)
*
The comparative information has been restated on account of correction of errors. Refer to Note 34.
Non-cash investing and financing activities
There were no non-cash investing and financing activities during the year ended 30 June 2021 (2020: Nil).
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 52
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
26. COMMITMENTS
Planned exploration expenditure
Exploration expenditure commitments represent tenement rentals and expenditure requirements that may be required
to be met under the relevant legislation should the Group wish to retain tenure on all current tenements in which the
Group has an interest.
The terms and conditions under which the Group retains title to its various tenements require it to meet tenement rentals
and minimum levels of exploration expenditure as gazetted by the Western Australian government, as well as local
government rates and taxes.
Within one year
Exploration commitments at reporting date not recognised as liabilities
2021
$’000
1,723
1,723
2020
$’000
1,514
1,514
Annual exploration expenditure after one year will be a similar commitment to that within one year, however this amount
is increased if new exploration tenements are added to the Group’s portfolio or reduced, if exploration tenements are
removed from the Group’s portfolio.
Physical gold delivery commitments
As part of the risk management policy of the Group and in compliance with the conditions required by the Group’s
financier Macquarie, the Group has entered into gold forward contracts to manage the gold price of a proportion of
anticipated sales of gold. The contracts are accounted for as sale contracts with revenue recognised once gold has been
delivered to Macquarie or its agent. The physical gold delivery contracts are considered a contract to sell a non-financial
item and therefore do not fall within the scope of AASB 9 Financial Instruments. Hence no derivatives are recognised. The
contracted sales price is rounded to the nearest dollar.
Between one and five years
- Fixed forward contracts
Gold for
physical
delivery
ounces
Contracted
gold sale
price
Value of
committed
sales
$
$’000
Mark-to-
market
$’000
200,000
2,250
450,000
(25,969)
Mark-to-market has been calculated using the average forward price of $2,379 per ounce as at 30 June 2021.
Mark-to-market represents the value of the open contracts at balance date, calculated with reference to the gold average
forward price at that date. A negative amount reflects a valuation in the counterparty’s favour.
27. CONTINGENT LIABILITIES
As at 30 June 2021 Capricorn Metals Ltd has bank guarantees totalling $324,294 (2020: $363,364), refer to Note 6.
As at 30 June 2021 the Group has utilised $18 million (2020: $2.5 million) of the $20 million Bank Guarantee Facility with
Macquarie under the existing Project Loan Facility in relation to the lateral pipeline that links Goldfields Gas Pipeline to
the KGP.
28. EVENTS SUBSEQUENT TO REPORTING DATE
There were no material events arising subsequent to 30 June 2021, to the date of this report which may significantly
affect the operations of the Group, the results of those operations and the state of affairs of the Group in the future,
other than:
Acquisition of Mt Gibson Gold Project
On 28 July 2021 the Company announced the acquisition of the Mt Gibson Gold Project which includes a JORC compliant
Inferred Mineral Resource Estimate as well as various prospective mining tenements, associated information,
infrastructure, improvements and associated environmental obligations.
The acquisition also involved the assumption of a third party royalty of $10 per ounce of gold produced in excess of 20,000
ounces from certain tenements and the granting of a 1% net smelter royalty over all project tenements for production in
excess of 90koz’s.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 53
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
The total consideration for the acquisition was $39.6 million comprised of $25.6 million in cash, from existing cash
reserves and funding facilities, plus $14 million settled via the issue of 7.65 million shares in the Company.
Extension of loan facility
In July 2021 the Company finalised a $20 million extension to the Company’s $80 million Macquarie debt facility on similar
terms to assist with the funding of the Mt Gibson Gold Project.
Exercise of options
On the 28 July 2021 the Company announced that it issued 10 million shares as a result of the exercise of 10 million
options at an exercise price of $0.60 each by directors of the Company.
29. FINANCIAL RISK MANAGEMENT
In common with other businesses, the Group is exposed to risks that arise from its use of financial instruments. The
Group’s key financial instruments comprise cash and cash equivalents, trade and other receivables and trade and other
payables, lease liabilities, derivative liabilities and borrowings.
This note describes the Group’s objectives, policies and processes for managing those risks and the methods used to
measure them. Further quantitative information in respect of those risks is presented throughout these financial
statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and
processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated
in this note.
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies. The
Group’s risk management policies and objectives are designed to minimise the potential impacts of these risks on the
Group where such impacts may be material. The overall objective of the Board is to set policies that seek to reduce risk
as far as possible without unduly affecting the Group’s competitiveness and flexibility.
(a) Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Equity investments
Gold forward asset
Financial liabilities
Trade and other payables
Lease liabilities
Derivative liability
Borrowings
2021
$’000
10,312
1,325
1,688
5,752
18,945
51,055
7,083
70,000
Restated*
2020
$’000
45,695
4,250
68
5,752
12,691
253
10,720
-
*
The comparative information has been restated on account of correction of errors. Refer to Note 34.
Capital risk management
The Board controls the capital of the Group in order to ensure that the Group can fund its operations and continue as a
going concern. As at 30 June 2021, under the Company’s ASX listing Rule 7.1 Capacity, the Company could issue up to
15% of it is previously approved issued capital as new shares, therefore Capricorn could issue up to 140,480,001 new
shares without requiring shareholder approval.
The Board effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by the Board to control the capital of the Group since the prior year.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 54
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
(b) Market risk
The Group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable. In August 2019
Capricorn announced the completion of 200,000 ounces of gold hedging with a forward delivery price of A$2,250 per
ounce.
The forwards have a delivery schedule covering 10,000 to 13,000 ounces of gold production per quarter from September
2021 to September 2025 at a flat forward price of $2,250 per ounce. The delivery programme matches debt quantum
and amortisation and life of mine production plans.
The Group does not speculate in the trading of derivative instruments. There has been no change to the Group’s exposure
to market risks or the manner in which it manages and measures the risk from the previous year.
(c) Foreign currency risk
The Group is exposed to fluctuations in foreign currencies arising from the sale and purchase of goods and services in
currencies other than the Group’s functional and presentation currency.
As a result of subsidiary companies being registered in Madagascar, the Group's statement of financial position can be
affected by movements in the AUD$/Ariary exchange rates. The Group do not seek to hedge this exposure given there
are minimal operations in these foreign subsidiaries and therefore minimal risk as a result of any changes in foreign
currency. There is no formal foreign currency management policy, however the Group monitors its foreign currency
expenditure and foreign subsidiary requirements.
(d) Financial risk management
The Group’s management, co-ordinates access to banking facilities, and monitors and manages the financial risks relating
to the operations, comprising mainly access to cash, and the level of trade and other payables in accordance with the
decisions of the Directors.
In the reporting period, the Group was not exposed to material financial risks of changes in foreign currency exchange
rates. Accordingly, the Group did not employ derivative financial instruments to hedge currency risk exposures.
(e) Credit risk
Credit risk is managed to ensure that customers are of sound credit worthiness and monitoring is used to recover aged
debts and assess receivables for impairment.
Credit terms are generally 30 days from the invoice date.
Risk is also minimized by investing surplus funds in financial institutions with a high credit rating.
(f) Interest rate risk
At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was:
Fixed rate instruments
Cash and cash equivalents
Term deposits
Lease liabilities
Variable rate instruments
Cash and cash equivalents
Borrowings
2021
$’000
2,369
324
51,055
7,941
70,000
2020
$’000
40,415
363
253
5,279
-
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore,
a change at reporting date would not affect profit or loss.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 55
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or
loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is
performed on the same basis for 2020.
Liquidity risk
Variable rate instruments
2021
2020
100 bp
increase
$’000
779
100 bp
decrease
$’000
(779)
100 bp
increase
$’000
53
100 bp
decrease
$’000
(53)
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting
its obligations related to financial liabilities.
The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate facilities are maintained.
Financial liability maturity analysis
2021
Trade and other payables
Lease liabilities
Borrowings
Total
2020
Trade and other payables
Lease liabilities
Total
Carrying
amount
liabilities
Total
contractual
cash flows
<6
months
6-12
months
$’000
$’000
$’000
18,945
18,945
-
1-2
years
$’000
-
2-5
years >5 years
$’000
$’000
-
-
65,907
5,368
5,319
10,113
27,673
17,434
72,724
14,975
18,727
24,805
14,217
-
$’000
18,945
51,055
70,000
140,000
157,576
39,288
24,046
34,918
41,890
17,434
Carrying
amount
liabilities
Total
contractual
cash flows
<6
months
6-12
months
$’000
$’000
$’000
$’000
12,691
253
12,691
12,691
253
66
12,944
12,944
12,757
-
68
68
1-2
years
$’000
-
119
119
2-5
years >5 years
$’000
$’000
-
-
-
-
-
-
(g) Financial instruments measured at fair value
The financial instruments recognised at fair value in the statement of financial position have been analysed and classified
using a fair value hierarchy reflecting the significance of the inputs used in making the measurements.
The fair value hierarchy consists of the following levels:
Level 1: quoted prices in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 56
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
Level 1
Level 2
Level 3
Total
Assets
Liabilities
2021
$’000
1,688
2,500
-
4,188
2020
$’000
68
2,700
-
2,768
2021
$’000
-
Restated
2020*
$’000
-
(7,082)
(10,720)
-
-
(7,082)
(10,720)
Included within Level 1 of the hierarchy are the BlackEarth Minerals NL and DiscovEx Resources Limited shares listed on
the Australian Securities Exchange. The fair value of these financial assets have been based on the closing quoted bid
prices at the end of the reporting period, excluding transaction costs.
Included within Level 2 of the hierarchy is a free hold property asset located in Antanarirvo, Madagascar that is held for
sale and the sold gold call option. The fair value of the free hold property asset is based on a valuation that was completed
in June 2020. The fair value of the sold gold call option was based on valuation techniques that employ the use of market
observable inputs. The most frequently applied valuation techniques include forward pricing and swap models using
present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign
exchange spot and forward rates, and spot and forward rate curves of the underlying commodity. The changes in
counterparty credit risk had no material effect on the sold gold call option recognised at fair value.
No transfers between the levels of the fair value hierarchy occurred during the current or previous reporting period. The
Directors consider that the carrying value of all financial assets and financial liabilities are recognised in the consolidated
financial statements approximate to their fair value.
30. OPERATING SEGMENTS
Basis for accounting for purpose of reporting by operating segments:
Accounting policies adopted
Unless otherwise stated, all amounts reported to the Board of Directors, being the chief operating decision makers with
respect to operating segments, are determined in accordance with accounting policies that are consistent to those
adopted in the annual financial statements of the Group outlined in Note 1.
Intersegmental transactions
Intersegment loans are recognised at the consideration received net of transaction costs. Intersegment loans are not
adjusted to fair value based on market interest rates.
2021
Revenue
Revenue
Other income
Total segment revenue
Result
Australia
$’000
Madagascar
$’000
Unallocated
$’000
Group
$’000
-
110
110
110
-
110
-
-
-
-
110
110
220
(4,765)
Profit/(Loss) before income tax
(4,621)
(144)
Assets/Liabilities
Segment assets
Segment liabilities
299,441
(169,141)
4,481
(3,402)
(12,890)
316,812
13,809
(186,352)
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 57
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
2020
Revenue
Revenue
Other income
Total segment revenue
Result
Profit/(Loss) before income tax as previously stated
Impact of restatement (refer to Note 34)
Profit/(Loss) before income tax after restatement
Assets/Liabilities
Segment assets as previously stated
Impact of restatement
Segment assets after restatement
Segment liabilities as previously stated
Impact of restatement
Segment liabilities after restatement
Australia
$’000
Madagascar
$’000
Unallocated
$’000
Group
$’000
-
173
173
(12,988)
(4,968)
(17,956)
116,388
5,752
122,140
(17,803)
(10,720)
(28,523)
122
-
122
(159)
-
(159)
7,104
-
7,104
(4,862)
-
(4,862)
-
-
-
168
-
168
122
173
295
(12,979)
(4,968)
(17,947)
(4,758)
118,734
-
5,752
(4,758)
124,486
4,317
-
4,317
(17,258)
(10,720)
(27,978)
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 58
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
31. RELATED PARTY DISCLOSURES
Key Management Personnel Remuneration
KMP remuneration has been included in the Remuneration Report section of the Directors Report for current KMP only.
The total remuneration paid to current and former KMP of the Group is as follows:
Short term benefits
Other service fees
Non-cash benefits
Post-employment benefits
Share based payments
Annual leave
Termination payments
Total Remuneration paid to KMP
Ultimate Parent
2021
$
2020
$
1,402,956
1,486,973
26,190
25,601
119,191
115,082
20,565
121,682
2,319,250
8,023,460
42,611
100,000
23,008
84,990
4,035,799
9,875,760
Capricorn Metals Ltd is the ultimate parent entity of the Group.
Controlled Entities
The consolidated financial statements include the financial statements of the Parent and the subsidiaries set out in the
following table:
Subsidiaries
Mazoto Minerals SARL
Energex SARL
Mining Services SARL
St Denis Holdings SARL
MGY Mauritius Ltd
Malagasy Graphite Holdings Ltd
Greenmount Resources Pty Ltd
Country
Principal activity
Madagascar
Madagascar
Exploration
Dormant
Madagascar
Exploration Services
Madagascar
Commercial Property
Mauritius
Investment Holding
Australia
Australia
Investment Holding
Development
Ownership (%)
2021
100%
100%
100%
100%
100%
100%
100%
2020
100%
100%
100%
100%
100%
100%
100%
The subsidiaries noted above are all controlled entities and are dependent on the parent entity for financial support.
Transactions with Related Parties
As at 30 June 2021, the net loans from the Parent to its subsidiaries totals $142,599,000 (2020: $112,322,000). This is
made up of loans to subsidiaries of $150,385,000 (2020: $119,869,836) with a provision for impairment of $7,786,000
(2020: $7,548,000).
Subsidiaries
Mazoto Minerals SARL
Energex SARL
Mining Services SARL
MGY Mauritius Ltd
Malagasy Graphite Holdings Ltd
Greenmount Resources Pty Ltd
Total
There are no other transactions between related parties within the Group.
CAPRICORN METALS LTD ABN 84 121 700 105
Loan
$’000
50
6
452
2,963
6,815
140,099
150,385
Provision for
impairment
$’000
(50)
(6)
(452)
(463)
(6,815)
-
(7,786)
Carrying value
$’000
-
-
-
2,500
-
140,099
142,599
Page | 59
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
32. PARENT ENTITY DISCLOSURES
The following information has been extracted from the books and records of the parent and has been prepared in
accordance with Australian Accounting Standards.
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Shareholders’ Equity
Issued capital
Reserves
Accumulated losses
Total Shareholders’ Equity
2021
$’000
7,402
146,932
154,334
643
55
698
180,629
11,500
(38,493)
153,636
2020
$’000
6,370
117,129
123,499
1,242
136
1,378
145,036
9,422
(32,336)
122,122
Statement of comprehensive income
Net loss attributable to members of the parent entity
Other comprehensive income for the period
(7,119)
(12,210)
-
-
Total comprehensive loss for the year attributable to members of the parent entity
(7,119)
(12,210)
The Parent entity has not entered into any contractual commitments for the acquisition of property plant and equipment
at the date of this report.
33. AUDITORS REMUNERATION
Amount payable to KPMG Australia
- Auditing or reviewing the financial report
2021
$
2020
$
45,000
31,560
Amounts payable to other audit firms for the audit and review of the financial reports of subsidiary companies was $1,699
(2020: $1,947).
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 60
Notes to the Consolidated Financial Statements (Continued)
For the year ended 30 June 2021
34. CORRECTION OF ERRORS
On 6 January 2020 the Company sold a 16,700 ounce gold call option with a strike price of $2,260 per ounce maturing on
30 June 2025 for a premium of $5.75 million. During the year the Group identified that the call option contract should
have been recognised as a derivative financial instrument at fair value on the balance sheet at the date the contract was
entered into. A corresponding asset relating to the option premium which was not received in cash but added to the
delivery price of the Group’s gold forward sales contracts for 200,000 ounces should also have been recognised.
At each reporting date the derivative instrument is subsequently measured at fair value with any movement in fair value
being recognised through the profit and loss. The asset will be progressively settled as the 200,000 ounces are delivered
into the forward sales contracts.
At 30 June 2020 the derivative is a non-current liability as the option can only be exercised at maturity, the corresponding
asset is classified as non-current consistent with the expectation that there will be no gold sales in the following 12 months
and therefore the premium will only be recovered subsequently.
The errors have been corrected by restating each of the affected financial statement line items for the year ending 30
June 2020.
The following tables summarise the impacts on the Group’s consolidated financial statements.
Impact of correction of error
Consolidated statement of financial position
As at 30 June 2020
Other assets
Others
Total Assets
Derivatives
Others
Total Liabilities
Accumulated losses
Others
Total Equity
As previously
reported
$’000
539
118,195
118,734
Adjustment
$’000
As restated
$’000
5,752
-
5,752
6,291
118,195
124,486
(10,720)
(17,258)
(27,978)
(57,251)
153,759
96,508
-
(10,720)
(17,258)
(17,258)
(52,283)
153,759
101,476
-
(10,720)
(4,968)
-
(4,968)
Consolidated statement of profit or loss and OCI
For the year ended 30 June 2020
Finance income/(expenses)
Others
Loss for the year
88
(4,968)
(13,607)
(12,979)
-
(4,968)
(4,880)
(13,607)
(17,947)
Total comprehensive loss for the year attributable to members of
the parent entity
(12,985)
(4,968)
(17,953)
Loss per share
Basic and diluted loss per share (cents per share)
Cents
(4.30)
Cents
(1.65)
Cents
(5.95)
There was no impact on the total operating investing or financing cashflows for the year ended 30 June 2020.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 61
Directors’ Declaration
1.
In the opinion of the Directors of Capricorn Metals Ltd:
(a)
The consolidated financial statements, notes and additional disclosures included in the directors’ report
designated as audited of the Company and Group, are in accordance with the Corporations Act 2001 and:
(i)
comply with Australian Accounting Standards and the Corporations Regulations 2001; and
(ii)
give a true and fair view of the financial position as at 30 June 2021 and of the performance for the year
ended on that date of the Company and Group.
(b)
There are reasonable grounds to believe that the Company and Group will be able to pay its debts as and when
they become due and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Chief Executive Officer and Financial Controller for the financial year ended 30 June 2021.
The Directors draw attention to the notes to the consolidated financial statements, which include a statement of
compliance with International Financial Reporting Standards.
2.
3.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
Directors by:
Mr Mark Clark
Executive Chairman
Perth, Western Australia
29 September 2021
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 62
Independent Auditor’s Report
To the shareholders of Capricorn Metals Ltd
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Capricorn Metals Ltd (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance with
the Corporations Act 2001, including:
•
•
giving a true and fair view of the Group’s
financial position as at 30 June 2021 and
of its financial performance for the year
ended on that date; and
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
The Financial Report comprises:
• Consolidated Statement of Financial Position as at
30 June 2021
• Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of
Changes in Equity, and Consolidated Statement of
Cash Flows for the year then ended
• Notes including a summary of significant accounting
policies
• Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year end or from time to time during
the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of
the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the
Code.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 63
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in
our audit of the Financial Report of the current period.
This matter was addressed in the context of our audit of the Financial Report as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on this matter.
Mine Properties Under Development ($208 million)
Refer to Note 14 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Our procedures included:
• We assessed the appropriateness of the
Group’s accounting policy against the
requirements of the accounting standards
and our understanding of the business.
•
•
•
On a sample basis, we tested the allocation
of expenditure between operating
expenditure, ore stockpiles and capital
expenditure by inspecting the nature of
source documents, such as supplier invoices
underlying the allocation for consistency
with the features contained in AASB 116.
Selecting a sample of supplier and contractor
invoices processed by the Group prior to
year end and post year end. We checked the
timing of the Group’s recorded Mine
Properties Under Development expenditure
against the details of the service description
on the underlying supplier or contractor
invoice.
Assessing the capitalisation of borrowing
costs related to the Karlawinda Gold Project
being the qualifying asset against the
requirements of the relevant accounting
standard.
Existence, accuracy and completeness of Mine
Properties Under Development related to the
Karlawinda Gold Project is a key audit matter due to:
•
•
the size of Mine Properties Under Development
which represents 70% of the Group’s total
assets as at 30 June 2021; and
during the period, the Group capitalised $124m
of pre-production and construction expenditure
as Mine Properties Under Development.
Mine Properties Under Development are recorded
by the Group in accordance with AASB 116
Property, Plant and Equipment. The standard
prescribes that expenditure shall be recognised as
an asset if, and only if:
a)
It is probable that future economic benefits
associated with the item will flow to the entity;
and
b) The cost of the item can be measured reliably.
The Group uses judgement and estimates in the
identification and allocation of cost between
operating expenditure, inventory ore stockpiles and
capital expenditure. We focused on:
•
•
the capitalisation and completeness of
expenditure recognised by the Group in
accordance with the accounting standards; and
the Group’s determination of the extent to
which borrowing costs incurred in respect of
the $80 million loan facility related to the
qualifying asset being Karlawinda Gold Project
are capitalised in accordance with the
accounting standards.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 64
Emphasis of matter – restatement of comparative balances
We draw attention to Note 34 to the Financial Report which states that the amounts reported in the
previously issued Financial Report for the financial year ended 30 June 2020 have been restated and
disclosed as comparatives in this Financial Report. Our opinion is not modified in respect of this matter.
The Financial Report of Capricorn Metals Ltd for the year ended 30 June 2020 was audited by another
auditor who issued an unmodified opinion on that Financial Report on 16 September 2020.
Other Information
Other Information is financial and non-financial information in Capricorn Metals Ltd’s annual reporting
which is provided in addition to the Financial Report and the Auditor's Report. The Directors are
responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report
or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date
of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001
•
•
implementing necessary internal control to enable the preparation of a Financial Report that gives a
true and fair view and is free from material misstatement, whether due to fraud or error
assessing the Group and Company’s ability to continue as a going concern and whether the use of
the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless they either intend to
liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 65
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf .This description forms part of our
Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Capricorn Metals Ltd for the year ended 30
June 2021, complies with Section 300A of
the Corporations Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
the Directors’ report for the year ended 30 June 2021.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
R Gambitta
Partner
Perth
29 September 2021
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 66
ASX Additional Information
As at 31 August 2021 the following information applied:
1.
a)
SECURITIES
Fully Paid Ordinary Shares
The voting rights attached to the ordinary shares are governed by the Constitution.
On a show of hands, every person present, who is a Member or representative of a Member shall have one vote and on
a poll, every Member present in person or by proxy or by attorney or duly authorised representative shall have one vote
for each share held. None of the options have any voting rights.
Size of Holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Number of
Shareholders
681
960
426
795
200
Number of
Shares
348,525
2,690,847
3,360,333
26,502,661
335,403,068
3,062
368,305,434
Percentage
%
0.09%
0.73%
0.91%
7.20%
91.07%
100.00%
There are 122 Shareholders with less than a marketable parcel at a price of $2.47, totalling 3,736 shares.
b)
Top 20 Shareholders
Name
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
Samoz Pty Ltd
J P Morgan Nominees Australia Pty Limited
HSBC Custody Nominees (Australia) Ltd
Rollason Pty Ltd
Centrepeak Resources Group Pty Ltd
Avenger Projects Ltd
Mutual Investments Pty Ltd
Mr Glyn Evans & Mrs Thi Thu Van Evans
BNP Paribas Nominees Pty Ltd Six Sis Ltd
Piama Pty Ltd
Macquarie Bank Limited
Nedlands Nominees Pty Ltd
Liberty Management Pty Ltd
BNP Paribas Noms Pty Ltd
Portbarb Pty Ltd
Topaz Holdings Pty Ltd
HSBC Custody Nominees (Australia) Limited - A/C 2
Top Twenty Shareholders
Total Issued Capital
Number of
Fully Paid
Ordinary
Shares Held
69,641,065
31,733,391
27,351,199
21,846,154
17,297,154
10,971,420
9,148,299
7,865,423
7,570,490
7,283,360
7,207,890
7,158,740
5,500,000
5,000,000
4,691,705
4,615,385
4,376,171
4,300,000
3,611,539
2,728,444
Percentage
%
18.91
8.62
7.43
5.93
4.70
2.98
2.48
2.14
2.06
1.98
1.96
1.94
1.49
1.36
1.27
1.25
1.19
1.17
0.98
0.74
259,897,829
368,305,434
70.57
100.00
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 67
ASX Additional Information (Continued)
c)
Unlisted Options
There are no unlisted options as at 31 August 2021.
d)
Unlisted Performance Rights
Performance Rights Issued Under Employee Incentive Scheme
Unvested 2019 performance rights (Test date: 17 Sep 2021)
Unvested 2019 performance rights (Test date: 17 Sep 2022)
Unvested 2020 performance rights (Test date: 1 Feb 2022)
Unvested 2020 performance rights (Test date: 1 Feb 2023)
Unvested 2020 performance rights (Test date: 30 Sep 2022)
Unvested 2020 performance rights (Test date: 30 Sep 2023)
Unvested 2020 performance rights (Test date: 18 Jan 2023)
Unvested 2020 performance rights (Test date: 18 Jan 2024)
Unvested 2020 performance rights (Test date: 29 Mar 2023)
Unvested 2020 performance rights (Test date: 29 Mar 2024)
Number of
Option Holders
2
2
10
10
4
4
1
1
1
1
Number of
Options
2,000,000
2,000,000
1,225,000
1,225,000
162,500
162,500
100,000
100,000
100,000
100,000
Total
36
7,175,000
Performance rights do not carry a right to vote. Voting rights will be attached to the unissued shares when the
performance rights have been exercised.
2.
SUBSTANTIAL SHAREHOLDERS
The names of the substantial shareholders listed in the Company’s share register as at 31 August 2021 were:
Shareholder
Hawke’s Point Holdings I Limited
Paradice Investment Management Pty Ltd
Eley Griffiths Group
Samoz Pty Ltd
Total
3.
ON MARKET BUY-BACK
There is currently no on-market buy-back in place.
4.
CORPORATE GOVERNANCE
Number of
Shares
34,340,852
30,678,354
22,160,966
22,052,000
109,232,172
Percentage
%
9.99
8.92
6.45
5.99
31.35
The Company’s corporate governance statement can be found at the following URL:
http://capmetals.com.au/corporate/corporate-governance/
5.
MINERAL RESOURCES AND ORE RESERVES
Bibra Ore Reserve
In April 2020, the Company released an updated reserve and resource statement for the Karlawinda Gold Project (KGP).
The JORC 2012 compliant Ore Reserve estimate was updated to 43.5 million tonnes @ 0.9g/t Au for 1,201,000 ounces
for the Bibra deposit (including the Southern Corridor pit) at the KGP, compared to the May 2018 Ore Reserve of 27.6
million tonnes at 1.0g/t gold for 892,000 ounces. The 35% increase in the JORC 2012 compliant Ore Reserves estimate
has been due to infill drilling at the Bibra deposit and inhouse open-pit optimisations.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 68
ASX Additional Information (Continued)
JORC-2012 compliant Ore Reserve as at 30 June 2021:
ORE RESERVE – KARLAWINDA GOLD PROJECT (A$1600/ounce assumption)
Deposit
Bibra
Southern
Corridor
Total
0.3<
Type Cut-off
Open
Pit
Open
Pit
0.3<
PROVED
Tonnes
(Mt)
Grade
(g/t Au)
Gold
Metals
(koz)
Tonnes
(Mt)
PROBABLE
Gold
Grade
(g/t Au)
Gold
Metal
(koz)
TOTAL ORE RESERVE
Tonnes
(Mt)
Grade
(g/t Au)
Gold
Metals
(koz)
-
-
-
-
-
-
-
-
-
39
0.9
1,090
39.0
0.9
1,090
4.6
43.5
0.8
0.9
111
4.6
1,201
43.5
0.8
0.9
111
1,201
Notes on the April 2020 Ore Reserve estimate:
1. Ore Reserves are a subset of Mineral Resources.
2. Ore Reserves reported in conformance with the JORC 2012 Code definitions.
3. Ore Reserves are calculated using a gold price of A$1600/ounce.
4. Ore Reserves are calculated using a cut-off grade between 0.3g/t and 0.4g/t Au.
5. The above data has been rounded to the nearest 100,000 tonnes, 0.1 g/t gold grade and 1,000 ounces. Errors of
summation may occur to rounding.
Mineral Resource Estimates
In April 2020, the Company announced an updated Bibra Mineral Resource estimate (inclusive of Ore Reserves) of 86.7
million tonnes at 0.8g/t gold for 2,145,000 ounces. This has increased by 41% or 620,000 ounces compared to the May
2018 estimate of 50.96 million tonnes @ 0.9 g/t Au for 1,525,000 ounces.
The company acquired the Mt Gibson Gold Project in July 2021, a project with historical gold production (in excess of
868,000 ounces) between 1986 – 1999. An updated Mineral Resource Estimate was completed by the company of 79.7
million tonnes at 0.8g/t gold for 2,083,000 ounces.
JORC-2012 compliant Mineral Resource Estimate as at 30 June 2021:
MINERAL RESOURCE – CAPRICORN METALS LTD (A$2000/ounce assumption)
INDICATED
Grade
(g/t
Au)
Ounces
(koz)
INFERRED
Grade
(g/t
Au)
Tonnes
(Mt)
Ounces
(koz)
Cut-
off
Tonnes
(Mt)
TOTAL MINERAL
RESOURCES
Grade
(g/t
Au)
Ounces
(koz)
Tonnes
(Mt)
0.3<
67.2
0.8
1,722
19.5
0.4<
-
-
-
67.2
0.8
1,722
79.7
99.2
0.7
0.8
0.8
422
86.7
2,083
79.7
2,505
166.5
0.8
0.8
0.8
2,145
2,083
4,228
Deposit
KGP
MGGP
Total
Type
Open
Pit
Open
Pit
Notes on the April 2020 Mineral Resource estimate:
1. Mineral Resources are calculated using a gold price of A$2,000/ounce.
2. Mineral Resources are calculated using a cut-off grade between 0.3g/t and 0.4g/t Au.
3. The above data has been rounded to the nearest 100,000 tonnes, 0.1 g/t gold grade and 1,000 ounces. Errors of
summation may occur to rounding.
4. See ASX announcement dated 17 April 2020 for Mineral Resource announcement on KGP and 28 July 2021 for MGGP.
Competent Persons Statement
The information in this report that relates to Exploration Results is based on information compiled or reviewed by Mr.
William Higgins who is a full-time employee of the Company. Mr. Higgins is a current Member of the Australian Institute
of Geoscientists and has sufficient experience, which is relevant to the style of mineralisation and types of deposit under
consideration and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the
“Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Higgins consents to
the inclusion in the report of the matters based on the information in the form and context in which it appears.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 69
ASX Additional Information (Continued)
The information in this report that relates to Mineral Resources is based on information compiled by Mr. Jarrad Price who
is Resource Geologist and an employee of the Company. Mr. Jarrad Price is a current Member of the Australian Institute
of Geoscientists and has sufficient experience, which is relevant to the style of mineralisation and types of deposit under
consideration and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the
“Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Price consents to the
inclusion in the report of the matters based on the information in the form and context in which it appears.
The information in this report that relates to Ore Reserves is based on information compiled by Mr. Daniel Donald. Mr.
Donald is an employee of Entech Pty Ltd and is a Member of the Australian Institute of Mining and Metallurgy (MAusIMM,
#210032). Mr. Donald has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity currently being undertaken to qualify as a Competent Person as defined in the 2012
Edition of the “Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Donald
consents to the inclusion in this report of the matters based on the information in the form and context in which it
appears.
Capricorn Metals confirms that it is not aware of any new information or data that materially affects the information
included in the previous ASX announcements on Mineral Resources and Metallurgy and, in the case of estimates of
Mineral Resources, Ore Reserves, Plant operating costs and Metallurgy, all material assumptions and technical
parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially
changed. The Company confirms that the form and context in which the Competent Persons’ findings are presented have
not materially changed from previous market announcements.
Forward Looking Statements
This announcement may contain certain “forward-looking statements” which may not have been based solely on
historical facts, but rather may be based on the Company’s current expectations about future events and results. Where
the Company expresses or implies an expectation of belief as to future events or results, such expectation or belief is
expressed in good faith and believed to have a reasonable basis. The detailed reasons for that conclusion are outlined
throughout this announcement and all material assumptions are disclosed.
However, forward looking statements are subject to risks, uncertainties, assumptions and other factors, which could
cause actual results to differ materially from future results expressed, projected or implied by such forward-looking
statements.
Such risks include, but are not limited to resource risk, metals price volatility, currency fluctuations, increased production
costs and variances in ore grade or recovery rates from those assumed in mining plans, as well as governmental regulation
and judicial outcomes.
Readers should not place undue reliance on forward looking information. The Company does not undertake any
obligation to release publicly any revisions to any “forward looking statement” to reflect events or circumstances after
the date of this announcement, or to reflect the occurrence of unanticipated events, except as may be required under
applicable securities laws.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 70
ASX Additional Information (Continued)
6.
TENEMENT SCHEDULE
Lease
Project
Company
Location
Status
Karlawinda
M52/1070
Karlawinda
E52/1711
Karlawinda
E52/2247
Karlawinda
E52/2398
Karlawinda
E52/2409
Karlawinda
E52/3323
Karlawinda
E52/3363
Karlawinda
E52/3364
Karlawinda
E52/3450
Karlawinda
E52/3474
Karlawinda
E52/3533
Karlawinda
E52/3541
Karlawinda
E52/3543
Karlawinda
E52/3571
Karlawinda
E52/3656
Karlawinda
E52/3671
Karlawinda
E52/3677
Karlawinda
E52/3729
Karlawinda
E52/3797
Karlawinda
E52/3808
Karlawinda
L52/174
Karlawinda
L52/177
Karlawinda
L52/178
Karlawinda
L52/179
Karlawinda
L52/181
Karlawinda
L52/183
Karlawinda
L52/189
Karlawinda
L52/192
Karlawinda
L52/197
Karlawinda
L52/223
L52/224
Karlawinda
M59/3281 Mt Gibson
M59/4021 Mt Gibson
M59/4031 Mt Gibson
M59/4041 Mt Gibson
Mt Gibson
E59/2450
Mt Gibson
E59/2546
Mt Gibson
E59/2594
Mt Gibson
E59/2606
Mt Gibson
E59/2608
Mt Gibson
E59/2611
Mt Gibson
E59/2612
Mt Gibson
P59/2286
Mt Gibson
P59/2287
Mt Gibson
P59/2290
Mt Gibson
P59/2291
Mt Gibson
P59/2292
Mt Gibson
P59/2293
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Greenmount Resources Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
CAPRICORN METALS LTD ABN 84 121 700 105
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Percentage
Held
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
Page | 71
ASX Additional Information (Continued)
P59/2294
P59/2295
P59/2296
P59/2297
P59/2298
P59/2299
P59/2300
P59/2301
P59/2302
P59/2303
P59/2304
P59/2305
P59/2306
P59/2309
P59/2310
L59/121
L59/1401
L59/161
L59/198
L59/451
L59/461
L59/531
G59/111
G59/121
G59/131
G59/141
G59/151
G59/161
G59/171
G59/181
G59/481
G59/67
Notes:
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Mt Gibson
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Crimson Metals Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Greenmount Resources Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Extension Hill Pty Ltd
Greenmount Resources Pty Ltd
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Western Australia
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Granted
Granted
Granted
Application
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
(1)
Under the terms of the Sale and Purchase Agreement between the Company and Extension Hill, the Company has purchased a number of
mining tenements at Mt Gibson from Extension Hill. The tenement transfer documentation has been lodged with the Department of Mines,
Industry Regulation and Safety. As at the date of this report the transfer of tenements are pending.
CAPRICORN METALS LTD ABN 84 121 700 105
Page | 72
2
0
2
1
Level 1, 28 Ord Street
West Perth WA 6005
TELEPHONE:
EMAIL:
WEBSITE:
+61 8 9212 4600
enquiries@capmet.com.au
capmetals.com.au